NEW DELHI — Gurdeep Singh Chadha was one of India’s most powerful businessmen, a liquor and real estate baron whose influence was intertwined with his money. Known as Ponty, he was a mysterious figure, described in the media as an “invisible man,” even as his political influence protected him.

But Mr. Chadha, who was in his mid- to late 50s, was killed on Saturday, shot in the chest, reportedly by his younger brother Hardeep, who was also killed, after an argument escalated into a gunfight at a luxury farmhouse outside New Delhi. The Shakespearean overtones were inescapable: the brothers had been fighting over the family business since their father’s death last year. They converged at the farmhouse with retinues of armed guards, and soon the bullets flew.

“Some businesses need BlackBerrys,” said a member of the extended family, who would identify himself only as Mr. Kohli. “Some businesses need guards.”

In an era of rampant crony capitalism, Mr. Chadha was among the class of businessmen who symbolized the nexus between money and political power in India. He exerted influence in four northern states, especially in Uttar Pradesh, home to roughly 200 million people, where he had been awarded monopoly control over the state’s wholesale liquor business and held the contract to provide millions of daily midday meals to poor schoolchildren.

His power in Uttar Pradesh was evident within hours of his death: nearly all the liquor stores in the huge state were shuttered, according to the online edition of Tehelka, an Indian newsmagazine, while his family’s multiplex movie theaters also closed down. Critics say Mr. Chadha bought his influence with bribes, though such charges were never proved.

“It’s a sad reflection on the state of Indian politics that a man like him could wield so much clout,” said Prakash Singh, who once commanded the state police in Uttar Pradesh. “He used money power to great advantage.”

The Chadha family’s wealth has been estimated to be $1 billion to $10 billion, with holdings that include paper mills, shopping malls, movie theaters, sugar refineries and residential real estate projects. The family business, now known as Wave Inc., began under Mr. Chadha’s father but expanded rapidly during the past decade as Mr. Chadha courted political leaders, especially Mayawati, a former chief minister of Uttar Pradesh. Mr. Chadha gained control of the liquor business and was allowed to purchase several state-owned sugar mills at deeply discounted prices.

In February, he seemed to have finally fallen out of official favor. Tax inspectors raided his offices, though so far nothing has come of the investigation. His supporters praised his generous nature, noting that he had built a hospital for mentally and physically disabled children, made donations to the poor and paid to restore temples of his Sikh religion.

“Successful people are always targeted; therefore, he was targeted by the media,” said Vijayant Jaiswal, a longtime business partner. “I would say he made the best use of the system. For any business of that scale, not just the liquor business, you need to have political backing.”

Mr. Chadha’s violent death stunned India’s political class, as well as his extended family. On Sunday, hundreds of people gathered at a crematorium in New Delhi, awaiting the arrival of his body and his brother’s. Arrangements had been made to conduct simultaneous funeral rites and incinerate the bodies side by side. Indeed, the family had bought half-page obituary notices in Sunday’s issues of some leading Indian newspapers, in which photographs of both brothers were featured.

“Imagine two brothers fighting, responsible for each other’s killing,” said one man at Sunday’s ceremony, Mr. Sahni, who gave only his surname. “Then they are on the same obituary page in the papers. And now they are being cremated side by side.”

There were conflicting witness accounts of Saturday’s confrontation, but, broadly, police officials told Indian news media that the shootout had been set off by a dispute over ownership of the luxury farmhouse. By some accounts, Mr. Chadha had taken an armed entourage to seize control of the property, and his brother Hardeep had rushed over with his own guards to confront him. An argument erupted, and the younger brother is reported to have shot Mr. Chadha. He was then shot by one of the guards who had accompanied Mr. Chadha.

Gaurang Kanth, a lawyer for Hardeep Chadha, said the brothers lived together with their families in a different farmhouse south of New Delhi, a common practice among many Indian families. He said the family was trying to divide business holdings amicably through an out-of-court settlement. He also said Hardeep Chadha had called him on Saturday as he was rushing to the farmhouse to confront Mr. Chadha and his guards.

“He said, ‘Make a police complaint,’ ” Mr. Kanth recalled.

Questions about the killings remain. Both brothers were killed and a third man was injured, yet no one else was reported wounded even though the rival groups apparently fired scores of bullets. Moreover, both brothers were accompanied by police officers from the state of Punjab, assigned to them for security. The officers’ actions in the gunfight are also under scrutiny.

“This whole thing was a complete surprise,” said Mr. Kanth, who was skeptical that ownership of the farmhouse was the real cause of the shootout.

“They had so much property,” he added. “Why would they be fighting over this? Something else triggered it.”

Hari Kumar and Raksha Kumar contributed reporting.

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A Sea of Supporters Mourn Indian Politician

By THE NEW YORK TIMESPublished: November 18, 2012

NEW DELHI — Hundreds of thousands of people poured into the streets of Mumbai on Sunday to mourn the death of one of the city’s most powerful and controversial figures, the right-wing political leader Bal K. Thackeray.

Mr. Thackeray, 86, who died on Saturday, was cremated Sunday in a ceremony at the city’s Shivaji Park, which was attended by political leaders, movie stars and thousands of others.

For years, Mr. Thackeray’s party, Shiv Sena, has been a major force in Mumbai politics, and the police have remained on high alert to protect against riots and violence following his death.

Crowds of his supporters paralyzed Mumbai, India’s largest city, and many shopkeepers simply closed their stores after his death was announced.

Mr. Thackeray built his career by championing Hindu causes in Mumbai and stoking grievances against Muslims and outsiders.

VIENNA — Steeped in myth and legend, the “Penacho”, a feather headdress supposedly worn by Aztec emperor Moctezuma II, continues to stir up passion in Austria and Mexico as it goes on display again after a years-long restoration.

Some say it was brought to Europe by Spanish conquistador Hernan Cortes, others that it was used by an Aztec high priest.

In any case, the vibrant green-and-blue headpiece — the only one of its kind still in existence — remains at the centre of a tug-of-war between Mexico, which wants to bring it home, and Austria, which argues it is too fragile to be transported.

“This is only the beginning,” Alfonso de Maria y Campos, director of Mexico’s National Institute of Anthropology and History (INAH), said this week at a presentation of the restored Penacho in Vienna.

“The initial thought behind this project continues to be the exhibition of this piece in Mexico,” he added.

First documented in 1596 in the collection of Tyrolean archduke Ferdinand II, the Penacho is one of the few surviving examples of ancient Mexican feather art, experts say.

And despite being almost 500 years old, it has retained its brilliant colours.

Some 450 iridescent green tail feathers from the rare quetzal bird were knotted together to form the 1.5-metre (five-foot) wide Penacho, embellished with gold adornments and smaller turquoise, red and brown feathers.

This method of assembly means the headdress could easily fall apart during transportation or if exposed to vibrations, according to a new study by Vienna’s University of Technology.

And this is the “key issue” at the centre of any restitution or loan debate, Austria’s foreign ministry says.

“Everything depends on the question of whether it is transportable. If the answer is no, there is no second or third question” as to whether Austria would be willing to send the Penacho back to Mexico, ministry spokesman Martin Weiss told AFP.

But de Maria y Campos, the INAH director, remains undeterred.

“Mexico should be able to share the piece, granted that we find the best way to send it to Mexico fully protected of any harm,” he told AFP.

“We don’t dispute the property or the possession.”

But “if we worked together to restore and study it, we can find a way to send it to Mexico to be exhibited.”

Gerard van Bussel, curator of the new Penacho exhibit at Vienna’s Museum of Ethnology, agreed: “At the moment, it’s unfortunately impossible, but who knows what might happen, what might become possible.”

Supporters of a loan note the Vienna university study focused on transportation by plane, leaving other options still open, and that changes in technology could facilitate shipment in the coming years.

Former Mexican President Vicente Fox appealed to his Austrian counterpart Heinz Fischer to send the Penacho back during the latter’s visit to Mexico in 2005, and indigenous Mexicans have repeatedly demanded the return of what they consider the “sacred crown of Moctezuma.”

Moctezuma II — the now preferred name for Montezuma II — was the last emperor of the Aztecs, ousted after the Spanish conquest of present-day Mexico.

But Mexico has stopped short of a formal request for permanent restitution, with the INAH’s director pushing instead for a “long loan.”

For him, the Penacho “belonged to Moctezuma, there is no doubt.” It is also “most likely” that it was brought to Europe by Cortes.

Other experts aren’t so certain.

“That’s a myth, a fable. There’s no evidence this is true,” said van Bussel, who says the headdress was more likely used by a priest.

While its origins remain a mystery, nobody denies the headpiece’s beauty and uniqueness.

Over the last two years, a large team of historians, archaeologists and ornithologists from Austria and Mexico have studied the Penacho, cleaning and preserving it for the future.

It is now being exhibited alongside other rare featherworks from ancient Mexico, including a shield, a large fan and intricate religious images. It is the first time in eight years the headdress has been put on display.

But the fragile headdress, held in a display case specially built to compensate for any movement caused by museum visitors walking around, remains the highlight of the exposition.

“It’s as if you see the Mona Lisa: it’s crafted so particularly well, it’s so beautifully done that it outshines the other objects,” said de Maria y Campos.

The return of the Penacho will likely continue to be discussed at bilateral meetings between Austria and Mexico, and a new treaty on cultural exchanges between the two countries is in the works.

In the meantime, the continued presence in Vienna of the headdress — a copy of which exists in Mexico City’s Museum of Anthropology — could have its benefits.

“I can definitely understand that Mexico would like to have a piece like this in Mexico,” van Bussel noted.

“But I think it’s also good publicity for Mexico if there are important objects from their Aztec culture in Europe.”

President Obama flew around the world to visit a giant reclining Buddha and pay a courtesy call on a hospitalized king — all to make a point.

After too many years of being obsessed with the Middle East, Obama argues, it is time for the United States to focus on the rise of Asia. The only problem? The Middle East is not cooperating.

Obama had not even landed here in Thailand on Sunday before finding his four-day, three-country Asia tour shadowed by the new crisis in Israel and Gaza. Aides have been briefing him on the latest in the conflict, and he has been working the phones with the leaders of Israel, Egypt and Turkey. Even his joint appearance with Thailand's prime minister was partly consumed by the Gaza question.

The confluence of events serves as a vivid reminder that the presidency is an exercise in juggling priorities. But the peculiar timing also underscores why Asia has often taken a back seat in U.S. policy to the more volatile areas of the world, not just under this president, but under the past six.

The logic behind Obama's so-called Asia pivot draws little dispute: By many measures, it is the region of the future, the area that will see nearly half of the world's economic growth outside of the United States over the next five years. To compete globally, the thinking goes, the United States will need to assert itself as an economic and strategic power in the Pacific.

Inside the Situation Room, though, long-term logic invariably falls victim to short-term crises, which are the specialty of places like the Middle East.

"One of the great challenges in the implementation and execution of foreign policy is to prevent the daily challenges, cascading crises, from crowding out the development of broader strategies in pursuit of the United States' long-term interests," Tom Donilon, the president's national-security adviser, said in a speech before leaving Washington.

It was in service of that goal that Obama scheduled his Asia trip. As his first overseas journey after re-election, it was meant to send a signal that his second term would focus on moving beyond the past, particularly the wars in Iraq and Afghanistan. He visited the region several times in his first term, but twice canceled Asia trips because domestic issues took priority.

After a day in Thailand, Obama landed in Myanmar on Monday for a historic visit highlighting the emergence of that isolated country, long known as Burma, from decades of repressive military rule. He was to meet with President Thein Sein, who has orchestrated the change, and the opposition leader Aung San Suu Kyi.

Along the way were planned announcements that he would send a new mission from the U.S. Agency for International Development to Myanmar and devote $170 million to aid projects over the next two years, according to aides.

"One of the things that we can do as an international community is make sure that the people of Burma know we're paying attention to them, we're listening to them, we care about them," Obama said in Bangkok. "And this visit allows me to do that in a fairly dramatic fashion."

Yet not as dramatic as Hamas lobbing rockets into Israel or Israel responding with punishing airstrikes and the threat of invasion.

Asia is not the only other region that finds it tough to compete for attention. Obama was in Latin America when he launched the air and naval campaign that helped topple Moammar Gadhafi in Libya.

"There is now war between Israel and Hamas in addition to a proxy war with Iran in Syria; there are huge demonstrations against the king in Jordan; and the IAEA last week said Iran had doubled its capacity to enrich uranium," said Elliott Abrams, who was President George W. Bush's Middle East adviser and is now at the Council on Foreign Relations. "The only way to pivot away from all that is to move to Mars — Myanmar isn't far enough."

Moreover, even Asia is inextricably linked to events in the Middle East, said Jon Alterman, director of the Middle East program at the Center for Strategic and International Studies.

"The reality is this — the more you pivot toward Asia, the more you have to care about the Middle East, because Asia gets so much of its energy from the Middle East," he said. "Our Asia pivot doesn't get us out of the Middle East. It just gets us into the Middle East from the other side."

Obama's advisers say they understand that. Rather than a zero-sum game, they said, Obama must find ways to focus on Asia even as older conflicts demand his attention.

"The rebalancing doesn't mean our short-term military requirements in the Middle East will diminish," said Jeffrey Bader, the president's former Asia adviser, who is now at the Brookings Institution.

Obama began his trip Sunday with a stop in Thailand, America's oldest ally in Asia. Joined by Secretary of State Hillary Rodham Clinton for their final foreign trip together before she steps down, Obama visited the Wat Pho Royal Monastery, one of the country's most revered cultural outposts, where both Americans took off their shoes and inspected the famed giant reclining Buddha.

Even domestic issues followed the president, as he found himself talking about the so-called fiscal cliff back home with a monk before asking him to pray for his success in resolving the problem.

"If a Buddhist monk is wishing me well, I'm going to take whatever good vibes he can give me to try to deal with some challenges back home," Obama said lightly.

The president and Clinton then headed to Siriraj Hospital to pay respects to King Bhumibol Adulyadej, the 84-year-old monarch, who has been ailing. From there, they went to the Government House for meetings and dinner with Prime Minister Yingluck Shinawatra, who came to office in 2011, five years after her brother, Thaksin Shinawatra, was deposed in a military coup.

"We have historically been an Asia-Pacific power, and I wanted to make sure that all our friends and partners throughout the region understood that we see this as a central region for our growth and our prosperity," Obama said. "It's not one that we can neglect."

Even if he has to keep one eye on the Middle East at the same time.

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19 November 2012 - 12H52

JPMorgan Chase to pay $297 mn for US misdeeds

AFP - JPMorgan Chase said Monday it had agreed to pay $297 millions to the US Securities and Exchange Commission to settle a dispute over sale of mortgage-backed securities.

Most of the punishable activity is attributed to Bear Stearns, the New York investment bank that JP Morgan bought urgently in 2008 in a deal organized by the Federal Reserve to prevent the imploding investment bank's losses from pulling down other banks.

Bear Stearns collapsed in 2007-2008, the first major casualty of the financial crash that was rooted in the imploding housing sector.

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Obama Tells House GOP America Will Blame Them if Middle Class Taxes Go Up

By: Sarah Jones November 17th, 2012Politicus

President Obama used his weekly address to urge congress to act now on the “one thing that everyone agrees on”, making sure taxes don’t go up on 98% of Americans and small businesses.

The President pointedly laid out only two scenarios: Taxes go up for everyone or Congress lets the Bush tax cuts for the 2% expire. Obama laid this on House Republicans, “The Senate has already passed a bill like this. Democrats in the House are ready to pass one, too. All we need is for Republicans in the House to come on board.”

PRESIDENT OBAMA: Four years after the worst economic crisis of our lifetimes, our economy is growing again and creating jobs. But we have much more to do. Our task now is to build on that progress. Because this nation only succeeds when we’ve got a growing, thriving middle class.

That’s what drives me. That’s what I campaigned on for the past year. That’s what will guide me in our work over the next four years. And I’m willing to work with anyone of any party to move this country forward.

Because soon, we face a very clear deadline that requires us to make some big decisions on jobs and taxes; on investments and deficits. Both parties voted to set this deadline. And I believe both parties can work together to make these decisions in a balanced and responsible way.

When it comes to taxes, for example, there are two pathways available.One says, if Congress fails to act by the end of the year, then everybody’s taxes automatically go up – including the 98% of Americans who make less than $250,000 a year. Our economy can’t afford that right now. You can’t afford that right now. And nobody wants that to happen.

The other path is for Congress to pass a law right away to prevent a tax hike on the first $250,000 of anyone’s income. That means all Americans – including the wealthiest Americans – get a tax cut. And 98 percent of Americans, and 97 percent of all small business owners, won’t see their income taxes go up a single dime.

The Senate has already passed a bill like this. Democrats in the House are ready to pass one, too. All we need is for Republicans in the House to come on board.

We shouldn’t hold the middle class hostage while Congress debates tax cuts for the wealthy. Let’s begin our work by actually doing what we all agree on. Let’s keep taxes low for the middle class. And let’s get it done soon – so we can give families and businesses some good news going into the holiday season.I know these challenges won’t be easy to solve. But we can do it if we work together.

That’s why on Friday I sat down with Congressional leaders to discuss how we can reduce our deficit in a way that strengthens our economy and protects our middle class. It was a constructive meeting. And everyone agreed that while we may have our differences, we need to come together, find solutions and take action as soon as possible.

Because if anything, that’s the message I heard loud and clear in the election.Work as hard as you can to make our lives better. And do it together.Don’t worry about the politics. Just get the job done.

Everywhere I went in that campaign – from farms in Iowa to the Vegas strip; from Colorado’s Rockies to the Florida coast – I was inspired by the grit and resilience of the American people, by your hard work and sense of decency. And it makes me want to work even harder for you. I saw it again this week in New York, where our fellow citizens are going through a really tough time, but are helping each other through it. And we’re going to be there to help them rebuild.Every single day, the good people of this country work as hard as you can, to meet your responsibilities. Those of us you sent to Washington are going to do the same.

Thanks and have a great weekend.

END TRANSCRIPT

The President isn’t offering “tax reform” as the only method for raising revenue to Republicans, but that isn’t stopping them from stomping their feet and repeating “tax reform” over and over again to the media. But tax reform is a vague term and post election, Republicans might be able to hide under it as they give in to the inevitable.

“Tax reform” coupled with steep tax cuts for the rich was floated by Mitt Romney and he lost. On the other hand, cutting the Bush tax cuts for the rich in order to help generate revenue was a big winner with the public and it also happens to be a winner with non partisan economists. It also happened to be one of THE issues Obama campaigned on, and won big with.

However, the President worded the tax plan in a way that is meant to assist Speaker Boehner in selling this to House TeaRepublicans, and as cover for their eventual cave on the issue. Obama said, “The other path is for Congress to pass a law right away to prevent a tax hike on the first $250,000 of anyone’s income. That means all Americans – including the wealthiest Americans – get a tax cut.”

Obama will give Republicans the dodge of calling it a tax cut for everyone, but the top 2% will pay more, after $250,000 of income.

That is also called a tax increase, but let us not quibble with poor John Boehner stuck between pulling the Norquist out of the tea and plunging approval ratings for the Republican Party as a whole.

As you listen to Republicans try to distance themselves from Mitt Romney and his “gifts” comments, ask yourself why, if they don’t agree, they are holding middle class taxes hostage in order to give gifts to the top 2%. Do they not think they are in Congress to serve the 98% as well?

Obama just laid the raising of taxes on the middle class on House Republicans; aka, fiscal cliff checkmate.

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Pelosi and Reid Have Obama’s Back: No Social Security Cuts and Taxes Must be Raised on the Rich

By: Jason Easley November 18th, 2012Politicus

Both Democratic leaders in the Senate have President Obama’s back on the fiscal cliff. Harry Reid and Nancy Pelosi are both emphatic about the wealthy paying more taxes, and no cuts being made to Social Security.

On ABC’s This Week Nancy Pelosi stood by the president’s insistence that the rich by made to pay their fair share.

Pelosi said, “Well, no, I mean, the president made it very clear in his campaign that there is not enough — there are not enough resources. What you just described is a formula and a blueprint for hampering our future. You cannot go forward — you have to cut some investments. If you cut too many, you’re hampering growth, you’re hampering education, our investments for the future. If it’s going to bring in revenue, the president has been very clear that the higher income people have to pay their fair share.”

Meanwhile, Senate Majority Leader Harry Reid has been making it crystal clear that any deal that cuts Social Security will not pass the Senate. Reid said, “I’ve made it very clear. I’ve told anyone that will listen, including everyone in the White House, including the president, that I am not going to be part of having Social Security as part of these talks relating to this deficit.”

If congressional Democrats are unified, President Obama’s hand to play in these negotiations grows even stronger. One of the problems in the two previous negotiations with congressional Republicans was that the Democratic side of the Senate was divided. Too many senators, including Reid himself, put their own reelection first. Harry Reid weakened Obama’s hand previous by actively looking to cut a deal, even if that deal was bad for Democrats.

Obama has gone from being viewed as toxic to the reelection hopes of congressional Democrats to being a twice elected president who oversaw unexpected gains in the Senate and House. The president has set the agenda on this issue, and congressional Democrats are getting in line behind him. Democrats may be even more unified than they were after the 2008 election. The infighting that with came control of both the House and Senate is gone.

People who worry that Obama is going to “cave” in these negotiations don’t seem to understand that every negotiation is different. Political climates change, and leverage shifts. Obama and the Democrats have all the leverage. They can do nothing and get what they want. It is the Republican signature issue of the Bush tax cuts that is on the line this time.

This isn’t 2010. It looks like Democrats are unified, and out to make Republicans pay a high price for their negotiating tactics of the past.

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Pelosi won’t accept fiscal cliff deal without tax hikes on the rich

By Agence France-Presse

WASHINGTON — The top Democrat in the House of Representatives expressed hope Sunday that US lawmakers will reach a deal by mid-December to avoid the fiscal cliff but stood firm on tax rises for the rich.

In an interview with ABC television’s “This Week,” Nancy Pelosi said she would not accept an agreement that keeps tax rates for the wealthy unchanged, as the Republicans in Congress are demanding.

President Barack Obama “made it very clear in his campaign that there are not enough resources,” Pelosi said in the interview aired Sunday.

“Just to close loopholes is far too little money…. If it’s going to bring in revenue, the president has been very clear that the higher income people have to pay their fair share.”

The fiscal cliff is a poison-pill law agreed by Republicans and Democrats in August 2011 that would see $600 billion worth of automatic budget cuts and expiring tax cuts come into force on January 1, likely throwing the world’s biggest economy back into recession.

After meeting with Obama at the White House following his November 6 re-election, congressional leaders are trying to hammer out a deal on long-term deficit reduction that includes both higher revenues and spending cuts.

House Speaker John Boehner has indicated that his fellow Republicans, who hold a majority in the lower chamber, would accept some revenue increases so long as they are coupled with “significant” spending cuts.

Boehner sits atop a restive coalition of ultra-conservative Republican lawmakers and faces a tough sell in any deal that eventually includes any kind of tax hikes — or “increased revenues” in government parlance.

Pelosi said negotiators in Congress were hard at work to avert the looming fiscal disaster.

“The spirit at the table was one of ‘everybody wants to make the best effort to get this done,’” she said.

“Hopefully that is possible; hopefully it is possible by the middle of December so the confidence of the markets, and most importantly the confidence of the consumers, returns to infuse our economy with demand, which creates jobs.”

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Republicans question timeline that led to Petraeus resignation

By The GuardianSunday, November 18, 2012 14:24 EST

Barack Obama may have known about the extra-marital affair that brought down former CIA boss David Petraeus prior to being re-elected president, the Republican head of the influential House intelligence committee claimed Sunday.

Casting aspersions over the official timeline of events, congressman Mike Rogers said he was “not sure” that Obama did not know about the four-star general’s infidelities ahead of the 6 November election, suggesting that attorney general Eric Holder may have notified him privately of the matter.

He called on Holder to address Congress over the issue.

Questions over who knew what and when in relation to the scandal have become a persistent irritant to the White House, with opponents of the president suggesting, in the words of House homeland security committee chairman Peter King, that something “doesn’t add up”.

It is thought that the FBI originally questioned Petraeus about his affair with his biographer Paula Broadwell in October but sat on the information until the night of the election.

At that point, agents notified national intelligence director James Clapper who advised the CIA chief to resign.

Even then it was not until the next day that the White House was informed of the situation.

It then took a further 24 hours before newly re-elected Obama was told that his intelligence chief was to tender his resignation, according to administration officials.

It was initially suggested by some in Washington that Petraeus’s resignation was timed so that he would avoid giving evidence to congressional bodies on the deadly assault on the US consulate in Benghazi.

That theory was blown out of the water on Friday, when the former CIA chief did give evidence to lawmakers. He told them during a closed-door session that he had always known that a terrorist group was behind the attack – some officials, notably UN ambassador Susan Rice had at first suggested that the assault was part of a spontaneous demonstration over a US-produced anti-Muslim film.

Petraeus is said to have explained in Friday’s hearing that a report provided to Rice – who is tipped to Hillary Clinton successor in the State Department – did not mention the reference to it being the result of a terrorist attack.

Despite the former CIA chief’s testimony, a succession of Republican lawmakers have kept up the pressure on Rice to give evidence in person over why she initially suggested that the attack – in which four Americans including ambassador Chris Stevens were killed – was the result of a protest that turned violent.

“She’s going to have to come in and testify at some point, whether it’s in a closed hearing or an open hearing,” Republican Saxby Chambliss, vice chairman of the Senate intelligence committee, told Fox News Sunday.

With suspicion over Petraeus’s resignation being linked to a Benghazi cover-up seemingly removed, some Republican lawmakers now appear to be suggesting that the president misled America over when he was informed about the general’s affair for political game.

On Meet the Press, Rogers said: “I’m not sure that the president was not told before election day. The attorney general said that the Department of Justice did not notify the president, but we don’t know if the attorney general…(notified him).

The Republican House representative added that Holder should come before the intelligence committees to discuss the matter.

“We could resolve this very quickly with a conversation in the intelligence spaces if he did have that conversation with the president,” he said.

CHEYENNE, Wyo. — By now, voters here are over the initial shock. The ranchers, businessmen and farmers across this deep-red state who knew, just knew that Americans would never re-elect a liberal tax-and-spender president have grudgingly accepted the reality that voters did just that.

But since the election, a blanket of baffled worry has descended on conservatives here like early snow across the plains, deepening a sense that traditional, rural and overwhelmingly white states in the center of the country are losing touch with an increasingly diverse and urban American electorate.

“It’s a fundamental shift,” said Khale Lenhart, 27, a lawyer here. “It’s a mind-set change — that government is here to take care of me.”

The share of white voters — and white men, specifically — shrank in this election as turnout grew among blacks, Hispanics and Asian-Americans, whose support for President Obama more than compensated for his losses among whites, exit polls showed. An analysis by the Pew Research Center found that minority voters had made up 28 percent of the electorate, up from 26 percent in 2008, a proportion expected to grow.

“Welcome to the next America,” said Paul Taylor, executive vice president at Pew. “Whatever that vote looked like this year, four years from now it’ll be more so, and eight years from now it’ll be even more so.”

None of this ensures election wins for Democrats. The tide of minority voters that helped elect Mr. Obama in 2008 ebbed just two years later in a welter of populist anger over budget deficits, job losses and Mr. Obama’s agenda, allowing Republicans to retake the House and make gains in the Senate in the midterm elections. And there is no guarantee that the next Democratic presidential candidate will match Mr. Obama’s huge margins or turnout with minority voters.

Still, if diversity is the future of American politics, conservatives in places like Wyoming, the least populous state, where 86 percent of residents are white, fear they may be sliding into the past.

Republican explanations for Mitt Romney’s loss — that Democrats turned out the urban vote, that the United States is no longer its “traditional” self, or that Mr. Obama had showered “gifts” on women, minorities and young voters — resonated in some conservative political circles here in the state capital.

“It spooks me,” said James Yates, 46, a self-made businessman who owns 15 restaurants and employs about 1,000 people. “The young vote and certainly the minority vote went toward the perspective of ‘What can I get?’ Where the government runs everything, it’s completely not sustainable. They don’t see that.”

People said their worries about the next four more years had little to do with Mr. Obama’s race, or even Democratic policies on abortion, same-sex marriage and birth control. Wyoming’s conservatism has some strong libertarian hues. What worries conservatives here is that an increasingly diverse and Democratic polity will embrace health care mandates, higher domestic spending and a bigger government role in people’s economic lives.

Nobody ever expected Wyoming to support Mr. Obama; Lyndon Johnson was the last Democrat to win its three electoral votes, in 1964. In a year when voters nationally sent more Democrats to Congress, supported same-sex marriage measures and legalized marijuana in two states, voters here increased the already large Republican majority in the State House, maintained it in the State Senate and expressed their opposition to the president’s health care law.

Mr. Romney won his second-largest victory here, beating Mr. Obama 69 percent to 28 percent. Only Utah, with its large Mormon population, favored Mr. Romney by a wider margin.

One of Wyoming’s newly elected officials is M. Lee Hasenauer, who runs a tree-trimming service and just won a two-year seat as a Laramie County commissioner. His views, described as “pretty out there” by fellow conservatives in the state, are that Mr. Obama won through voter fraud, that the country is veering leftward toward fiscal ruin and that something fundamental is now different about American politics.

He was bewildered by the results on Election Day.

“I thought Romney was a shoo-in,” he said. “Something is way wrong. It may take a revolution to straighten out our government.”

His friend Bradley Harrington, who publishes a year-old conservative newspaper called Liberty’s Torch and is the host of a radio talk show in Cheyenne, said the election vindicated conservative politicians and commentators who talked about the 47 percent of Americans who pay no income tax, about makers and takers.

Jeff Prince, 42, a financial adviser, invoked John F. Kennedy’s famous inaugural question to describe what he saw as the difference between conservative, self-reliant Wyoming and liberal precincts along the coasts and in cities.

“They think, ‘What can he do for me?’ as opposed to what Kennedy said in the ‘60s, ‘What can I do for my country?’ ” Mr. Prince said.

That mentality of fierce independence is complicated by land and money. The government owns half the land in Wyoming, as national forest, parkland or other state land, and the natural resources here have long padded state coffers.

A 2011 study by the Pew States Project found that Wyoming received more federal funds per resident than any other state, largely because of royalties from mining and drilling. That $3,757 per person went to health care, transportation, education and other government programs.

But voters in Wyoming have little control in the management of those lands. Washington, they say, determines which lands are opened for drilling, the environmental reviews on oil drilling, whether wolves are a protected species or fair game for hunters. They see a portent in drilling plans proposed by the Interior Department that would close 1.6 million acres of federal land to oil-shale exploration.

Middle-aged white men here bristled at the notion that they were now the Republican Party’s last constituency. Look at Senator Marco Rubio of Florida, they said, or at Gov. Susana Martinez of New Mexico; Mia Love, a black Mormon mayor in Utah; or Lynn Hutchings, a newly elected black state representative. But they said Republicans would need to talk differently about immigration, reproductive issues and income inequality if they wanted to win over voters outside places like this one.

After all, as Buck Holmes, a county commissioner-elect here and self-described “sensible conservative” put it: “Not everyone thinks the same way as Wyoming conservatives do.”

The bitter battle in Gaza highlights the fact that Islamist extremists have gained ground in the Palestinian territories with support from Egypt and Iran. The next battleground is likely to be the United Nations, where the Palestinians are seeking observer status. Has Israel miscalculated with its new offensive?

The current situation in the Middle East is reminiscent of events that unfolded shortly before Christmas in 2008, when then-Israeli Prime Minister Ehud Olmert launched a campaign against the radical Islamist group Hamas in the Gaza Strip to stop it from launching rockets at his country -- and, most likely, with the aim of securing a second term in office. Elections were around the corner, and Olmert's opponent, Benjamin Netanyahu, was ahead in the polls.

Olmert had more than 1,000 bombs dropped on Gaza, and 10,000 Israeli troops marched into the territory. Building by building, they fought their way through refugee camps, villages and Gaza City. Well over 1,000 Palestinians lay dead in the wreckage before the extremists finally abandoned their resistance. "We have reached all of our objectives in Gaza," Olmert declared after three weeks of war, "and Hamas has been dealt a heavy blow." Opposition leader Netanyahu wasn't convinced. "The next government will have no choice but to finish the job," he said. Netanyahu ultimately won the election, using slogans like "Strong on Security" in his campaign.

Now Netanyahu is fighting for votes once again, and this time, as the current prime minister, he too is fighting terror. His army has been attacking Gaza since the middle of last week, in an operation dubbed Pillar of Defense. Netanyahu's aim is to use force to achieve the peace on the Gaza front that Olmert was unable to secure four years ago. And perhaps, two months before the election, Netanyahu is also hoping for a war bonus, even though he is already ahead in the polls. At the very least, a military campaign against Gaza is a distraction from the serious social problems Israel currently faces.

But it's also a dangerous game for the entire Middle East. Egypt's new president, Mohammed Mursi, promised Hamas that his country was "standing with all its resources to stop this assault, to prevent the killing and bloodshed of the Palestinians." Most of the players in this conflict are literally being driven to war by pressures at home. Netanyahu can't show weakness before the elections, Hamas has to protect its reputation as it competes with even more radical Islamists, and Mursi must defend himself against critics in the Muslim Brotherhood, who accuse him of being too soft on Israel.

First Strike on Tel Aviv Since First Gulf War

When the conflict began, Netanyahu promptly suffered a serious psychological setback when two rockets were fired at Tel Aviv early Thursday evening. The last person who dared to strike Israel in this fashion was Iraqi despot Saddam Hussein, who retaliated in the Gulf War over Kuwait in 1991 by ordering that Scud missiles be fired at Tel Aviv. And as if nothing were sacred to the attackers, they also fired rockets at Jerusalem on Friday afternoon.

For the extremists in the poverty-stricken Gaza Strip, the attacks represented a spectacular triumph, even though the rockets failed to strike any targets. For the first time, they had shown that they have weapons capable of reaching Israel's two major cities. The missiles, known by Hamas activists as M-75, were allegedly built in Gaza and have a range of 75 kilometers (46.6 miles). The extremists also have Iranian-made Fajr-5 missiles.

For years, Qassam rockets were the weapons of choice for Hamas militants firing on Israeli territory, but they were only capable of terrorizing residents in the border zones. The thought of air raid sirens going off in Tel Aviv and Jerusalem seemed inconceivable until now.

Israel's attacks in recent days have been massive. Since the start of the operation on Wednesday, the Israeli military claims it has struck some 1,350 "terror sites," including rocket launchers, launching pads and weapons caches. The militants in Gaza, for their part, returned Israeli fire with a total of close to 850 rockets so far, many of which Israel's "Iron Dome" missile defense system intercepted in time. By Monday, the hail of missiles had claimed three dead and dozens of wounded on the Israeli side.

Both United Nations Secretary General Ban Ki-moon and United States President Barack Obama guaranteed Netanyahu their support in the fight against terror, but they also urged the Israeli leader to exercise restraint. Nevertheless, the Israeli military mobilized 16,000 reservists, amassing an army of 75,000 troops by the weekend. Defense Minister Ehud Barak, who is campaigning for his splinter party, assured Israelis that "the other side will pay its price." Prime Minister Netanyahu threatened that "all options" were on the table.

Could this be a repeat of 2008? This time, the players are too driven by their own announcements and self-created expectations, and too entangled in alliances and dependencies. Netanyahu is also under pressure on the global political stage. Only a few weeks ago, it seemed as if the possibility that Israel would go it alone and strike the Iranian nuclear program could spoil US President Barack Obama's changes of re-election. But now, if Netanyahu can't even deal with Hamas, it will be a triumph for Tehran.

The 'Iranian Front'

On the other hand, a devastating strike against the extremists in Gaza would also be a serious blow to the regime of Iranian President Mahmoud Ahmadinejad. According to Israeli intelligence information, Iran's Revolutionary Guards are the most important suppliers of weapons to the extremists, and they could very well have provided Hamas with its rockets. Tehran manufactures the Fajr, or "Dawn" missile.

Like other arms, the six-meter (20-foot) rocket reaches the Gaza Strip through one of the many tunnels under the border with Egypt. Some of the tunnels are now so big that even small trucks can drive through them.

Both sides now run the risk of becoming embroiled in a war. Netanyahu has an interest in bringing calm to the Gaza front, partly to cover his back in case he plans to attack Iran's nuclear facilities. The regime in Tehran, however, emphasizes deterrence. It wants to demonstrate how much firepower its allies in Gaza have, in case they are determined to exact revenge. Israel's military leadership is already referring to Gaza as the "Iranian front."

Some in Israel even believe that the strike against the Gaza extremists is merely a trial run for an attack on Iran's nuclear facilities. For four years, the prime minister did relatively little against daily rocket attacks from "Hamastan," says an Israeli security expert. But now he has crossed his "personal red line" and is taking action, first with a military strike against Gaza and then possibly against Iran.

A New Balance of Power

But can Netanyahu succeed where Olmert failed, despite a campaign that lasted for weeks and claimed so many victims? And would it even be smart to destroy Hamas?

The balance of power in the Middle East has shifted fundamentally, and not in Jerusalem's favor. With the overthrow of Egyptian autocrat Hosni Mubarak, Israel lost its most important security partner in the region. Although his successor Mursi has officially left the Muslim Brotherhood, he remains indebted to the Islamists. If he is too accommodating to the Jewish state, he runs the risk of being forced out of office.

The Muslim Brotherhood, much like its allies with Hamas, is also under pressure, this time from Islamists prepared to use violence. Members of the Muslim Brotherhood and Salafists are demonstrating against Israel on Tahrir Square in Cairo. Their banners read: "We demand total war against Israel until Jerusalem and the holy ground of Palestine are liberated. From the Mediterranean to Jordan."

The so-called Salafists and the group Islamic Jihad are very popular in Gaza. They view the Hamas strategy of targeted but limited pinpricks against Israel as outrageous. They want nothing short of "holy war" against the "Zionists."

Hamas' ConundrumHamas, on the other hand, has developed into a political entity, one that wants to be heard and have a seat at the table, and to be taken seriously on the international stage. This is the main reason that the organization, under Gaza Prime Minister Ismail Haniyeh, agreed to secret talks with Israeli negotiators. Only recently, representatives of both sides came together in Cairo at a meeting set up by Egyptian intelligence. The Hamas leadership must know that it can't win a war against Israel. And Israel, for its part, must realize that it needs the organization if it doesn't want to see Gaza taken over by far more radical groups.

But Hamas' more extremist adversaries and hardliners within its own ranks would perceive its agreeing to a cease-fire too early as a betrayal of the Islamic cause, especially after the targeted killing of Hamas military leader Ahmed Jabari last Wednesday, which set off the most recent escalation.

The Israelis struck a vehicle carrying the highest-ranking Hamas militant with an air strike so precise that windows in the surrounding buildings remained intact.

Jabari allegedly commanded up to 20,000 fighters. "His elimination is a message to the leaders of Hamas," the Israeli intelligence service noted triumphantly. In addition to Jabari, more than 90 Palestinians, including 50 civilians and a number of children, had died in the air strikes by Monday morning. Hundreds have been wounded in the strikes. "Bomb Tel Aviv," thousands chanted at the funeral for the Hamas leader.

Terror Camps in Egypt

This time, they are apparently better equipped to offer resistance than in the last Gaza war. Since the change in power Cairo, jihadists from the entire Islamic world, especially from North Africa, have set up terrorist camps on Egypt's Sinai Peninsula. They include hundreds of fighters who have no fear of death, and certainly not of Israelis.

After Friday prayers, Salafists handed out flyers printed in Aryan that called upon their followers to fight for an Islamic state on the Sinai Peninsula. Jihadists there are not just attacking Egyptian police officers and soldiers, but are also infiltrating the Gaza Strip to engage in the conflict there.

Moderate forces, like Palestinian President Mahmoud Abbas, who now has only the support of residents of the West Bank, are being marginalized. The leader of the Palestinian Autonomous Authority in Ramallah opposes violence against Israel, but he is increasingly coming under pressure to act in the face of Netanyahu's rigorous settlement policy.

While his Hamas rivals are boosting their profile by firing rockets at Israel, Abbas must look on as, bit by bit, settlers take away land from his people. Negotiations with Netanyahu not premised on the condition of a halt to settlements would border on political suicide for Abbas.

A Fateful Decision at the UN

For this reason, the Palestinian president is challenging Netanyahu on the diplomatic front. If all goes according to plan, the General Assembly of the United Nations will recognize Palestine as an "observer nation" on Nov. 29. A petition for full membership failed last year when the United States threatened to use its veto on the Security Council. But Abbas seems almost certain of a majority in the General Assembly, which is more pro-Palestinian.

If the Europeans, whose aid money is vital to the Autonomous Authority, don't change Abbas's mind, escalation will be inevitable. Diplomats expect that the United States will freeze additional funds destined for the Authority and, as a punishment for all UN members, could also drastically cut its contributions to the UN.

The Israelis, for their part, are threatening to push ahead even more aggressively with settlement construction, as well as to annex the Jewish colonies in the West Bank. That would put an end to the two-state solution that moderate Palestinians still hope will come about, and that liberal Israelis support.

It would also be a triumph for the radicals, who, on Friday evening in Gaza, were once again chanting: "Bomb Tel Aviv."

Translated from the German by Christopher Sultan

Gazans search desperately for safe place under fire

By Agence France-PresseMonday, November 19, 2012 17:51 EST

GAZA CITY, Palestinian Territories — Every time six-year-old Mohammed hears the sound of Israeli missiles landing near his home in Gaza City, he turns to his mother and asks: “When are we going to die?”

Traumatised by the bombardment, and terrified for their children, his family has decided to leave Gaza City, which has borne the brunt of relentless Israeli air strikes for six straight days.

So they upped and moved to Khan Yunis in southern Gaza, which has been less affected by the violence.

But they know that nowhere in Gaza is safe. No corner of this tiny coastal strip has been left untouched. Every major urban centre in the territory of some 1.6 million residents has been bombarded.

There are no bomb shelters for residents, leaving each family to find the safest place in their home to cling to when the warplanes arrive.

Mohammed’s family hope Khan Yunis might prove slightly safer, and are staying there with his mother’s relatives.

“My children are terrified,” says his mother Umm Jihad, 37.

“My son Mohammed refuses to eat. He follows me everywhere because he’s so scared and asks me every 10 minutes when we’re going to die.

“He says he won’t go back to school because he’s scared he’ll be martyred or that he’ll come back from school and find that I or his brothers have been killed,” she says.

Their home is on the ninth floor of an apartment building in the western sector of Gaza City.

“The strikes would shake the whole building, and eventually they blew out the windows and knocked down the door. That was when we decided to go Khan Yunis,” says Umm Jihad, speaking to AFP on the phone.

Khan Yunis has also been hit in the conflict, but less so than Gaza City and the family feels better protected.

“The fear and anxiety have followed me here though,” she says. “I don’t know what to say to my children and how they will overcome this fear when the war is over.”

Walid Sultan, 30, fled his home in the northern town of Beit Lahiya along with his pregnant wife, their daughter and dozens of their neighbours after their district, which is close to the border with Israel, came under heavy fire.

He came to Gaza City to take refuge with a friend in the Sheikh Radwan neighbourhood, but has found no peace there either.

“We fled death, but it is waiting for us at every corner,” he says.

“I left my home in Salateen because I was scared the Israelis would launch a ground invasion. Last time they did that, their tanks came to our area and destroyed my home.

“I feel the fear of my daughter, who has panic attacks and screams at the sound of the shelling. My wife is in the final months of her pregnancy, but where can we go?”

Suhaila Nouri, 43, decided to leave after an awful night when she was convinced she would die.

“It was a terrible night. The explosions were so loud it sounded like they were inside my house,” she says. “I just sat there and waited to die.”

In the morning she discovered shrapnel and debris all over the garden of her Beit Lahiya home and decided to move to Gaza City, to stay with her brother.

The city is under attack constantly from the air, but as a resident of the border area, Nouri decided it would be safer to move in case Israel launches a ground invasion.

Maysa Shanti, 40, left her home in northwestern Gaza City with her family, and moved into her relatives’ house in the city’s upscale Rimal neighbourhood.

“There was heavy Israeli bombing of a resistance training site behind my apartment. It shattered the windows of my house and I decided to leave for somewhere safer because I was afraid for my family and the kids were panicking,” she says.

The days and nights of bombing have left the family bleary-eyed and exhausted, desperate for a chance to sleep.

“But we can’t sleep here either,” Shanti says.

“The sound of explosions is continuous here as well. All we can do is try to comfort each other.”

************

Israel’s Peres accuses Iran of instigating Gaza violence

By Agence France-PresseMonday, November 19, 2012 23:47 EST

WASHINGTON — Israel’s President Shimon Peres accused Iran of encouraging the Palestinians to continue rocket attacks on Israel rather than negotiating a ceasefire, saying “they are out of their mind.”

At the same time, Peres praised Egypt’s President Mohamed Morsi for the constructive role he has played in the intensifying crisis.

“The unpleasant one is the Iranians. They are trying again to encourage the Hamas to continue the shooting, the bombing, they trying to send them arms,” Peres said in interview on CNN.

“They are out of their mind,” he said.

Peres said Israel had no choice but to wage its offensive against Hamas in Gaza despite the rising civilian casualties, citing what he said were 1,200 missiles fired from the territory in the past six days.

“In one minute, if they stop shooting, there won’t be any casualties,” he said.

In singling out Iran, Peres said, “We are not going to make a war with Iran. But we are trying to prevent the shipping of long range missiles which Iran is sending to Hamas.”

“But Iran is a problem, world problem, not only from the point of view of building a nuclear danger, but also from the point of being a center of world terror.

“They finance, they train, they send arms, they urge, no responsibility, no moral consideration,” Peres said.

Asked whether a ground war in Gaza was inevitable, Peres said he was hopeful that there would be a ceasefire.

“The negotiations are still being continued. It’s difficult for all parties, but it’s not over and the best choice for all of us is to stop shooting,” he said.

****************

November 19, 2012

While Trying to Mediate, Egypt Blames Israel for Gaza Conflict

By DAVID D. KIRKPATRICKIHT

CAIRO — While holding itself out as an honest broker for truce talks between Israel and Hamas over the Gaza conflict, Egypt’s new government sought on Monday to plunge into the battle over international public opinion on behalf of the Palestinian cause — an arena where the Israelis, more experienced in the world of the free press and democratic politics, have historically dominated.

In Egypt’s most concerted effort to win more global public support for the Palestinians, advisers to Egypt’s President Mohamed Morsi, a former leader of the Muslim Brotherhood who has been an outspoken supporter of Hamas, invited foreign correspondents in Cairo to a background briefing at which a senior Egyptian official sought to blame Israel for the conflict while at the same time maintaining Egypt’s role as an intermediary pressing both sides for peace. “We are against any bloodshed,” the official said repeatedly, arguing that Egypt sought stability and individual freedom for all in the region.

Speaking on condition of anonymity to avoid upsetting the talks with the Israelis, the Egyptian official argued that the West, which supports Israel’s right to defend itself against rocket attacks from Gaza, was essentially blaming the victim.

“It is so strange people are talking about the rights of self-defense,” he said. “The self-defense of whom? Of the occupied people? Of the besieged people? Of the hurt people? No, the self-defense of the most powerful state in the region and the self-defense of the occupying force of Gaza and Palestine. This is what some of the international community are talking about.”

He implicitly compared the leaders of Hamas to George Washington in America or Charles de Gaulle in France: Heros because they resisted foreign occupation by armed force. “Now, there is an occupation going on for decades and these people who are suffering this occupation are trying to resist, are trying to gain their rights,” the official said. “But we are saying no, they don’t have the rights, they have to stay calm, be killed, be occupied, be besieged, and the self-defense is the right of the occupier.”

The official called this “a huge manifestation of double standards that we will not allow.”

He argued that there was “no comparison” between the level of force used by both sides, and that the Western media had wrongly adopted Israel’s use of the term “rockets” to describe Hamas missiles that were better described as primitive “projectiles.” And he compared the Israeli killing of the top Hamas military official, Ahmed al-Jabari, which in Hamas’s view started the battle, to a hypothetical assassination of Israel’s defense minister, Ehud Barak. “What would be the reaction of the Israelis? Then can you understand the reaction of the other side?”

Echoing an account presented by President Morsi, the Egyptian official said that Israel’s killing of Mr. Jabari had broken an Egyptian-brokered cease-fire agreement that both sides had accepted the day before Mr. Jabari was targeted.

The Egyptian official said that Mr. Morsi had asked President Obama to help press Israel to agree to a cease-fire, while Mr. Obama in turn had encouraged Mr. Morsi to work on both the Israelis and the Palestinians, since Egypt was already in contact with both sides. The Morsi administration appreciated President Obama’s efforts, the official said, though he added: “We differ on the blame issue, because the blame should not be directed toward the Palestinians in Gaza; the blame should be directed toward the occupation.”

In a sign of the Egyptian government’s inexperience at such public-relations campaigns, the official sought to reinforce his points by distributing a handout printed from the Internet, where it had circulated widely without clear authorship. It was titled "10 things you need to know about Gaza," with headings like “Prison Camp” and “(Un) fair fight.”

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SPIEGEL ONLINE11/20/2012 12:38 PM

Erractic Rockets: How Hamas Terror Works Along the Israeli Border

By Raniah Salloum in Sderot, Israel

Hamas is firing rockets into Israel from the Gaza Strip each day, bringing normal life to a halt for Israelis living near the border. Each time the sirens wail, residents are forced to flee into shelters. Many feel that any kind of retaliation is justified if it helps ease their fears.

Life slowly comes to a standstill the closer one gets to Israel's border with the Gaza Strip. In Ashkelon, some 15 kilometers (around nine miles) from Gaza, the playgrounds and beaches are empty, but there are still some signs of daily life -- with a handful of people and cars on the streets.

Drive further south, however, and the three-lane motorway suddenly becomes completely deserted. For minutes at a time, no other people are to be found. Through the open car window, the sirens are sounding again. They wail each time a rocket approaches from Gaza. In cities in the region like Ashkelon, they warn residents about a dozen times a day that the unseen rockets are on their way. Their message is that within 15 to 30 seconds, the rocket will hit somewhere in the vicinity.

Israelis who live near the Gaza Strip have the drill down perfectly. The siren means that they must quickly head to a shelter. Given that most people would only know how to get to safety that hastily within their own homes, almost everyone is staying in these days. Once it became clear that the war wouldn't be over within a day or two, a number of other people packed their bags on Friday and went to stay with relatives further north.

But the likelihood of being hit by a rocket attack is low in Israel, despite the frequent trips residents in target cities take to shelters. About one-third of the rockets are destroyed in the air by Israeli missile defense systems. Besides, Hamas' homemade bombs don't appear to have much explosive power. They may damage homes, but they rarely destroy an entire building. Still, anyone living within reach of hostile missiles has little use for the theory of probability.

Weighing the Value of Human Lives

Along the roadside a military bus comes into view, having pulled over due to the siren. Some 20 reserve troops, young people in uniforms, are stretched out next to the vehicle in the roadside ditch. A few minutes further down the road lies Sderot. Located only two kilometers from Gaza, it has become a ghost town.

Standing on a hill outside Sderot with two friends, Sharon can see Gaza. The young Israeli with a three-day beard doesn't want to be photographed there next to an old sofa watching the bombs hit Gaza with binoculars, a scene he fears will make him seem callous. He admits he's a bit afraid, but he would also like to see some "action."

From a military perspective, the rockets coming out of Gaza are pinpricks. But they are pinpricks that no country would tolerate. Three Israelis have been killed by rocket attacks this year -- and all three of the deaths occurred during the Gaza offensive on Thursday in the city of Kiryat Malakhi, when their apartment was hit.

This element of random chance is what creates the sense of terror. It could happen to anyone. And when fear is at play, the rules of statistics and logics don't apply.

"We don't want war, but there is no other choice," Sharon says. "We aren't the bad guys. We also don't want Palestinian children to die. But when it comes down to your own children or someone else's, the choice is clear."

At least 111 Palestinians, including 56 civilians, have been killed in the last seven days by Israel's bombardment of the Gaza Strip. Some 840 have been wounded, Gaza health officials are reporting. During the Gaza War in 2008, some 1,000 Palestinian civilians were killed. But the losses of human lives on either side don't cancel each other out. Sharon is still making calculations, though.

"No Israeli wants Palestinian children to die, but after the Gaza War we had a few months of quiet," he says. "If there are two or three months when no rockets fly, then it's worth it."

************

November 20, 2012

Clinton to Visit Middle East in Move to Defuse Gaza Conflict

By PETER BAKER and ISABEL KERSHNERNYT

PHNOM PENH, Cambodia — President Obama sent Secretary of State Hillary Rodham Clinton to the Middle East on Tuesday to try to defuse the conflict in Gaza, the White House announced.

Mrs. Clinton, who accompanied Mr. Obama on his three-country Asia trip, left on her own plane immediately for the region, where she will stop first in Jerusalem to meet with Prime Minister Benjamin Netanyahu of Israel, then head to the West Bank to meet with Palestinian leaders and finally to Cairo to consult with Egyptian officials.

The decision to dispatch Mrs. Clinton dramatically deepens the American involvement in the crisis. Mr. Obama, on an Asian tour, made a number of late-night phone calls to the Middle East on Monday night that contributed to his conclusion that he had to become more engaged and that Mrs. Clinton might be able to accomplish something.

With the United Nations Secretary General Ban Ki-moon also scheduled to arrive in Israel on Tuesday, a senior official in the prime minister’s office said Israel decided to give more time to diplomacy before launching a ground invasion into Gaza. But Israel has not withdrawn other options.

“I prefer a diplomatic solution. I hope that we can get one but if not, we have every right to defend ourselves with other means and we shall use them,” Prime Minister Netanyahu said in a statement at the start of a meeting in Jerusalem with German Foreign Minister Guido Westerwelle.

“As you know, we seek a diplomatic unwinding to this, through the discussions of cease-fire,” Mr. Netanyahu added. “But if the firing continues we will have to take broader action, and we won’t hesitate to do so.”

The Health Ministry in Gaza said the death toll had climbed by late Tuesday morning to 112, roughly half of them civilians and including children. Three Israelis died in a rocket attack last week.After an Asian summit dinner in Phnom Penh on Monday night, Mr. Obama called President Mohamed Morsi of Egypt to discuss the situation, then spoke with Mr. Netanyahu and called Mr. Morsi back. He was up until 2:30 a.m. on the phone, the White House said. He consulted with Mrs. Clinton repeatedly on the sidelines of the Asian summit meetings on Tuesday.

“This morning, Secretary Clinton and the president spoke again about the situation in Gaza and the they agreed that it makes sense for the secretary to travel to the region so Secretary Clinton will depart today,” said Benjamin Rhodes, a deputy national security adviser to Mr. Obama. “Her visits will build on the engagement that we’ve undertaken in the last several days.”

Mr. Rhodes said that “any resolution to this has to include an end to that rocket fire” by Hamas militants on Israeli communities but “the best way to solve this is through diplomacy.”

He added: “It’s in nobody’s interest to see an escalation of the military conflict.”

Mrs. Clinton will not meet with Hamas representatives on her trip, but with leaders of the Palestinian leadership in the West Bank, which is at odds with the Hamas rulers of the Gaza Strip. “We do not engage directly with Hamas,” Mr. Rhodes said.

Instead, Mr. Obama is focused on leveraging Egypt’s influence with Hamas to press for a halt to the rocket attacks. “We believe Egypt can and should be a partner in achieving that outcome,” Mr. Rhodes said.

Mr. Rhodes reaffirmed that the United States supports Israel’s right to defend itself and said Mr. Obama did not ask Mr. Netanyahu to hold off a ground incursion into Gaza.

In Jerusalem, an official in the prime minister’s office said that the country’s top nine ministers, who make up the inner security cabinet, held discussions late into the night on the state of the diplomatic efforts and Israel’s military operation in Gaza. The goal of the operation, Israel says, is to end years of rocket fire by Gaza militants against southern Israel.

Egypt has been brokering efforts, with American involvement, for a cease-fire. “What is on the table is not there yet. It does not bring about what we need,” the official said, referring to Israel’s demands for an end to the threat of rocket fire.

Gaza militants fired more than 70 rockets in heavy barrages at southern Israel on Tuesday morning and 8 of them struck in densely populated areas.

A soldier was moderatly wounded in one rocket attack, according to the military. Houses were hit in Beersheba and Netivot, causing damage but no injuries. Other rockets hit a car and damaged a bus in Beersheba. The passengers had disembarked on hearing a warning siren and escaped harm. Some 27 rockets aimed at populated areas were intercepted by Israel’s Iron Dome anti-rocket missile system and others landed in open ground.

Separately, an Israeli man attacked an Israeli security guard outside the United States Embassy in Tel Aviv with an axe and a knife on Tuesday, very lightly injuring the guard. The guard fired warning shots, apprehended the assailant and handed him over to the Israeli police, according to a police spokesman who described the episode as a “criminal incident” unrelated to the current security situation.

Tens of thousands of Israeli reserve soldiers have been mobilized and troops and tanks have massed along the border with Gaza, ready to go in the order is given for a move into densely-populated coastal enclave that would significantly escalate the conflict.

So far Israel has carried out its campaign from the air, pounding more than 1,000 targets in Gaza, including long-range rocket launchers and stores. Gaza militants have fired more than 800 rockets at Israel and several have reached as far north as Tel Aviv.

There has been no apparent let-up in Israeli airstrikes.

The Israeli military said on Tuesday its warplanes had hit 100 targets overnight. One was the main branch of the National Islamic Bank, which Hamas opened in 2010. Witnesses said that two rockets fired from an Apache helicopter hit the bank, on the ground floor of an apartment building, igniting a large fire that injured seven people who lived nearby.

Late Monday night, a bomb dropped from an Israeli F-16 warplane crashed into a house in the northern town of Beit Lahiya, killing Fowad Khalil Hijazi, 46, and two of his children, Mohamed, age 3, and Suhaib, 2, according to officials at Kamal Adwan Hospital there.

Their mother was in critical condition. At the Hijazi home, neighbors were combing through the crater left by the bomb, pulling out remnants of the explosives and laying them on a mat, and packing jars of olives and other food into a storage container.

Among the latest casualties were Akram Marouf, who died in a drone attack in Beit Lahiya; a 15-year-old boy who was hunting birds in an open space in Beit Lahiya when he was struck; and Mahmoud Al Zahar, felled by an airstrike in central Gaza City.Mrs. Clinton’s trip comes as she is preparing to step down as secretary of state, presenting her a delicate late test after four years in which Mr. Obama’s administration has failed to achieve the broader peace it once sought in the region.

With the president’s re-election behind him, Mrs. Clinton plans to resign around the time of the second inauguration on Jan. 20. Aides said she would stay until a successor can be confirmed as long as it does not drag too long into the new year.

The abrupt change in plans here underscored the challenges for Mr. Obama as he tries to reorient American foreign policy away from its dominant focus on the Middle East and more toward the Pacific-Asia region that he sees as the long-term future. Even as he chose Southeast Asia as the destination for the first overseas trip after winning a second term, Mr. Obama has found himself drawn every day into the deadly dispute consuming the Middle East.

WASHINGTON — The new eruption of violence between Israel and Palestinian militants from Gaza is a stark reminder for newly re-elected President Barack Obama of unfinished business from his first term.

Obama’s first trip after securing the White House was to Southeast Asia, underlining his determination to “pivot” US foreign policy away from Middle East woes and towards challenges and opportunities in the Pacific.

But, even has he tours Myanmar and Malaysia, Obama has once again been forced to keep up-to-date with goings on in Gaza, where Israeli strikes have killed more than 100 Palestinians within the last six days.

Washington has made it clear that it blames the Palestinian movement Hamas for the escalation, insisting that Israel has the right to defend itself from rocket attacks fired out of Gaza at civilian Israeli targets.

But Obama is also keen that the violence not get out of control, as the tension has made the delicate task of reorienting US regional policy in the wake of the Arab Spring revolts even more complicated.

“The president has been updated regularly,” deputy White House national security adviser Ben Rhodes told reporters aboard Air Force One on the way to Cambodia from Myanmar.

Earlier, on a stop in Bangkok, Obama said: “Israel has every right to expect it does not have missiles fired into its territory. If that can be accomplished without a ramping up of military activity in Gaza, that is preferable.

“That is not just preferable for the people of Gaza, it is also preferable for Israelis because if Israeli troops are in Gaza, they are much more at risk of incurring fatalities or being wounded,” he said.

The raids, launched after Gaza-based militants fired rockets into Israel, are the most widespread in the Strip since the December 2008 to January 2009 Israeli offensive that claimed the lives of 1,400 Palestinians.

When he first took office in January 2009, Obama promised to put the Mideast peace process back on track. He gave a landmark speech in Cairo, seen as reaching out a hand to the Muslim world.

Obama hosted Israeli Prime Minister Benjamin Netanyahu and Palestinian President Mahmud Abbas at the White House in September 2010.

But talks fell apart three months later over the issue of Israeli settlements on territory Israel occupied during the 1967 Six Day War.

Meanwhile, with the Israeli-Palestinian peace process effectively stalled, the wider region has seen a series of revolts that have, in some cases, brought Islamist governments to power, in others triggered violent conflict.

In the process, prominent US allies have been ousted.

Most prominent perhaps was Egyptian president Hosni Mubarak — a friend of Washington and a guarantor of the Camp David Accords.

His successor, Mohamed Morsi, sprang from the Islamist Muslim Brotherhood of which Hamas is an offshoot.

Obama spoke with Morsi twice last week to ask him to step in. He reiterated the message again in a call on Monday.

“The administration recognizes the Egyptian government is in the best position to broker a ceasefire between Israel and Hamas,” said Haim Malka of the Center for Strategic and International Studies.

“They’re looking for the Egyptians to play a major role in mediating the end of the current crisis.”

At the State Department, spokeswoman Victoria Nuland refused to be drawn on whether Egypt was doing enough.

“I don’t think it’s helpful from this podium for us to be getting into the details of those conversations or to be giving individual interlocutors a grade on how they are doing,” she said.

Jonathan Schanzer, vice-president of research at the Foundation for Defense of Democracies, sees the conflict in Gaza as proxy war between Iran — under fire for its nuclear program — and the West.

“The fact that the United States and many European countries appear to give to Israel a green light to operate inside Gaza has something to do with the fact that we are now in a worldwide battle against Iran,” he said.

“This is very much seen as a part of the strategic calculus from the West to say ‘Yes, get rid of the Iranian nodes inside Gaza and make it clear that Iran cannot operate there’.”

Domestically, more than four times as many Americans — 59 percent — support Israel compared with 13 percent who side with the Palestinians, according to a CNN-ORC International poll.

*************

November 19, 2012

Gaza Crisis Poses Threat to Faction Favored by U.S.

By ETHAN BRONNERIHT

RAMALLAH, West Bank — In the daily demonstrations here of solidarity with Gaza, a mix of sympathy and anguish, there is something else: growing identification with the Islamist fighters of Hamas and derision for the Palestinian Authority, which Washington considers the only viable partner for peace with Israel.

“Strike a blow on Tel Aviv!” proclaimed the lyrics of a new hit song blasting from shops and speakers at Monday’s demonstration, in a reference to Hamas rockets that made it nearly to Israel’s economic and cultural capital. “Don’t let the Zionists sleep! We don’t want a truce or a solution! Oh, Palestinians, you can be proud!”

Pop songs everywhere are filled with bravado and aggression. But this one reflects a widespread sentiment that does not augur well for President Mahmoud Abbas and his Palestinian Authority, which is rapidly losing credibility, even relevance. The Gaza truce talks in Cairo, involving Egypt, Turkey and Qatar, offer a telling tableau. The Palestinian leader seen there is not Mr. Abbas, but Khaled Meshal, the leader of the militant group Hamas, who seeks to speak for all Palestinians as his ideological brothers in the Muslim Brotherhood rise to power around the region.

Israel is also threatening Mr. Abbas, even hinting that it may give up on him, as he prepares to go to the United Nations General Assembly on Nov. 29 to try to upgrade the Palestinian status to that of a nonmember state. The Israelis consider this step an act of aggression, and even some Palestinians say it is somewhat beside the point at this stage.

“His people are being killed in Gaza, and he is sitting on his comfortable chair in Ramallah,” lamented Firas Katash, 20, a student who took part in the Ramallah demonstration.

For the United States, as for other countries hoping to promote a two-state solution to this century-old conflict, a more radicalized West Bank with a discredited Palestinian Authority would mean greater insecurity for Israel and increased opportunity for anti-Western forces to take root in a region where Islamism is on the rise.

Since Hamas, which won parliamentary elections in 2006, threw the Fatah-controlled authority out of Gaza a year later, Mr. Abbas has not set foot there. Yet he will be asking the world to recognize the two increasingly distinct entities as a unified state.

Manar Wadi, who works in an office in Ramallah, put the issue this way: “What is happening in Gaza makes the Palestinian Authority left behind and isolated. Now we see the other face of Hamas, and its popularity is rising. It makes us feel that the Palestinian Authority doesn’t offer a path to the future.”

In Cairo on Monday, Mr. Meshal seemed defiant and confident in his new role, daring the Israelis to invade Gaza as a sixth day of Israeli aerial assaults brought the death toll there to more than 100 people, many of them militants of Hamas and its affiliates. Rockets launched from Gaza hit southern Israel, causing some damage and panic, but no casualties, leaving the death toll there at three.

“Whoever started the war must end it,” Mr. Meshal said at a news conference. “If Israel wants a cease-fire brokered through Egypt, then that is possible. Escalation is also possible.”

Officials in the authority have been holding leadership meetings, staying in close touch with the talks in Cairo and issuing statements of solidarity. They have also sent a small medical delegation to Gaza and argue that there is a new opportunity to forge unity between the two feuding movements. But they are acutely aware of their problem.

“The most dangerous thing is the fact that what we could not do in negotiations, Hamas did with one rocket,” one official said, speaking on the condition of anonymity. “The people had such excitement seeing the occupiers run in panic. It’s a very dangerous message.”

Mr. Abbas, whose popularity has been on the decline as the Palestinian Authority faces economic difficulty and growing Israeli settlements, also ran into trouble not long before the Gaza fighting began when he seemed to give up on the Palestinian demand of a right of return to what is now Israel.

Many Palestinians believe that Israel launched its latest operation in Gaza to block the Palestinian Authority’s United Nations plans by embarrassing it. Israeli officials say that is ridiculous: the operation’s purpose is to stop the growing number of rockets being fired at their communities, and Israelis interrupted their deliberations over the United Nations bid to wage the military campaign.

But Israel says anything that does not involve direct negotiations is a waste of time. The government of Prime Minister Benjamin Netanyahu has repeatedly threatened to take severe retaliatory steps against the Palestinian Authority, including cutting off badly needed tax receipts to Palestinian coffers, should Mr. Abbas go ahead at the United Nations.

In a speech here on Sunday night at a Palestinian leadership meeting, Mr. Abbas repeated his determination to go to New York and ask for a change in status to that of nonmember state. He has chosen the symbolically significant date of Nov. 29, when the General Assembly voted in 1947 to divide this land into two states, one Jewish and the other Palestinian Arab.

The United States has asked Mr. Abbas not to do so, but instead to resume direct negotiations with Israel, which have essentially been frozen since 2008.

Mr. Abbas and his prime minister, Salam Fayyad, are viewed in the West — and by some Israelis — as the most moderate and serious Palestinian partners ever to lead the Palestinian national movement. But Mr. Netanyahu’s government increasingly disagrees and says that the Palestinian Authority is losing any significance in its calculations.

“I think what stands out from this event is the irrelevance of Abu Mazen,” Moshe Yaalon, the minister of strategic affairs, said on Monday, using the name by which Mr. Abbas is widely known. “He’s only relevant for declarations and for unilateral steps to seek recognition at the U.N.”

Another senior Israeli official, speaking on the condition of anonymity so he could talk candidly, said of Mr. Abbas: “He cannot even visit his own territory in Gaza. How can the states that will vote for Palestinian statehood plan on giving him recognition? The most basic element of statehood is control of your territory. This is the theater of the absurd.”

The Palestinian Authority maintains well-trained police and military forces that keep order in the West Bank, and it promotes economic growth within the confines of the occupation, leading to some business activity. These are functions Israel would otherwise have to carry out itself, and it has been widely argued that Israel will make every effort to keep the authority functioning.

But the senior official said that view is fading in the government. He said that Mr. Netanyahu is not yet ready to call it quits with the authority but that some around him are. “The number of ministers who say we must keep the Palestinian Authority alive is decreasing rapidly,” he said. “More and more ministers today see the Palestinian Authority as a strategic threat.”

Robert M. Danin, a senior fellow at the Council on Foreign Relations in Washington and a former senior State Department official, said Israel has contributed to Hamas’s rise in stature by holding it responsible for rocket fire from more radical groups in Gaza.

“In calling upon Egypt to rein in the Gaza leaders, Hamas’s centrality grows rather than diminishes,” Mr. Danin said. “It is this that draws leaders from throughout the Middle East rushing to Gaza while skipping Ramallah to court the Hamas leadership. Yet by bypassing Ramallah and President Abbas, they further marginalize the moderate leaders as the proper address for resolving problems.”

There are Palestinians who say that the Israeli operation in Gaza will strengthen unity efforts between the authority and Hamas because it shows how vulnerable all Palestinians are and how much they need shared strength. Officially, Hamas accepts Mr. Abbas’s United Nations plan, but some in the West Bank suspect it will ultimately undermine it in a power struggle.

“The Palestinian Authority is making a last-ditch effort to save the political paradigm of two states by going to the U.N.,” said Sam Bahour, an American-Palestinian businessman. “It is the only alternative to violence. The problem is that people view the Palestinian Authority as being incompetent to do anything. And the Israelis are making it worse. Increasingly, the Hamas agenda and the Israeli one seem to be the same on this point — derailing the Palestinian leadership.”

ISTANBUL — The European Union offered crucial support for the new Syrian political opposition on Monday, calling the group legitimate representatives for the Syrian people in a move that burnished the new coalition’s credibility as it seeks more international aid to help in the fight against the government of Bashar al-Assad.

The union stopped short of conferring full diplomatic recognition, as France, Turkey and several Arab countries of the Persian Gulf have done, and instead urged the coalition to develop a plan to create a “credible alternative to the current regime.”

The new group, the National Coalition of Syrian Revolutionary and Opposition Forces, as it is formally known, said on Monday that it would be based in Cairo, the Egyptian state news agency reported. Formed after days of negotiations in Doha, Qatar, the coalition replaces an earlier one that was regarded as ineffectual, in part because it included few figures from within Syria and had little credibility with front-line fighters.

“The E.U. looks forward to this new coalition continuing to work for full inclusiveness, subscribing to the principles of human rights and democracy and engaging with all opposition groups and all sections of Syrian civil society,” the European Union said in a statement Monday.

As the new group continues to gain international recognition, it hopes to secure agreements from Western and Arab countries to supply heavier weapons to the rebels to hasten the demise of Mr. Assad’s government.

Meanwhile, within Syria, the coalition’s legitimacy is being tested by some of the fighting groups, whose links to outside political leaders have been tenuous in the past. Several extremist Islamist groups fighting in Syria have said they reject the new Syrian opposition coalition, which was formed under the guidance of the United States, Turkey and gulf countries. The development underscored worries about the rising influence of religious fundamentalism amid the chaos of the bloody civil war in Syria.

The Islamist groups are involved in fighting government forces in Aleppo, Syria’s largest city, and include units aligned with Al Qaeda. They made their declaration in a video uploaded to the Internet on Sunday, saying their goal was to establish an “Islamic state” in Syria and that they would reject any plans for the country imposed from abroad.

At the conclusion of the video, a man holds up a Koran and yells, “Make the Koran your constitution and you will prosper!”

The video, in turn, was quickly rejected by commanders of the Free Syrian Army, the umbrella group for loosely knit bands of opposition fighters across Syria, and some residents of Aleppo mocked the video in postings on Facebook. While it called attention to the growing role played by Islamist groups, the video, and the controversy it created among other rebel groups, also highlighted the lack of unity among the myriad groups trying to topple the government of Mr. Assad.

In an interview with Orient TV, a private Syrian channel based in Dubai, United Arab Emirates, Abed al-Jabar al-Akidi, the commander of a rebel military council in Aleppo that supports the new political coalition, dismissed the video as merely “an expression of a personal opinion” and insisted that the coalition had broad support among the fighters.

Fighting continued to rage along Syria’s border with Turkey on Monday. Continued fighting was reported in Ras al-Ain, a city of mixed Arab and Kurd population that was bombarded fiercely by government jets last week.

Reuters reported that rebel fighters in the city, who are mainly Arabs, clashed with Kurdish fighters there, raising the ominous prospect of an armed struggle for control of Syria’s predominantly Kurdish region in the east, which the government had largely ceded to local control. A local Kurdish official in Ras al-Ain was said to have been shot dead by a rebel sniper.

Most of the fighting in the Syrian conflict so far has been between the mainly Sunni Arab rebels and the Alawite-led government forces. But many analysts worry that the country’s Kurds, some of whom have received military training in northern Iraq, might resort to arms to secure more autonomy or even independence for their corner of Syria, further destabilizing the country.

The fighting between the Kurds and rebels also has regional implications; the war has emboldened Kurdish militants in southeastern Turkey, where they have fought the government for nearly 30 years, to step up their attacks.

Hania Mourtada contributed reporting from Beirut, Lebanon.

****************

SPIEGEL ONLINE11/20/2012 01:28 PM

The World from Berlin: Turkish Call for Help Puts Germany in a Tough Spot

Turkey wants its NATO partners to provide Patriot missiles after mortar rounds were fired onto its territory from Syria. The request has triggered a political row in Germany, with the opposition concerned about being dragged into the Syrian conflict. Media commentators say Germany must help.

Military deployments are always a political minefield in Germany, for obvious and good reasons, given its history. So it's no surprise that Turkey's request for Patriot missiles from its NATO partners to help secure its 900-kilometer border with Syria led to a political row in Berlin, where opposition politicians have warned that a deployment could end up pushing Germany into the Syrian civil war.

"The deployment of hundreds of German soldiers with Patriot missiles would put us onto a very slippery slope into a Syrian mission." Omid Nouripour, security expert for the opposition Greens, said on Saturday.

Philipp Missfelder, a foreign policy spokesman for Chancellor Angela Merkel's conservatives in the Bundestag lower house of parliament, accused the opposition of endangering Germany's reputation as a reliable partner.

He may draw some relief from Turkey's announcement on Tuesday that NATO member states have agreed to supply Turkey with Patriots. The country has been talking to NATO allies about how to boost security on its border with Syria after mortar rounds landed inside its territory.

Berlin Signals Willingness to Help

"The countries who supply NATO with Patriot systems are known, we have reached an agreement with those countries. The official application will be completed as soon as possible," Turkish Foreign Minister Ahmet Davutoglu told a news conference. "Intensive work is underway and the talks have reached the final stage."

Only the United States, the Netherlands and Germany have the appropriate Patriot missile system available. The German government already signalled that it will provide help by saying it would analyze the request "with solidarity."

Germany can't afford to say "No" after it was heavily-criticized for abstainingin the United Nations Security Council vote that established the no-fly zone in Libya last year.

The opposition center-left Social Democrats and Greens have called for a German parliamentary vote on the deployment of the Patriot missiles systems along with around 170 troops, and Defense Minister Thomas de Maizière said on Monday that parliament would be involved. It's unclear at present whether a vote is needed, however.

German media commentators on Tuesday say Germany is obliged to help Turkey with what is largely a symbolic gesture of solidarity. After all, the Patriots aren't suited to neutralizing mortar rounds. The risk to Germany's international reputation by refusing assistance is greater than the risk of being dragged into the Syrian war by sending just 170 troops, the commentators say.

Center-left Süddeutsche Zeitung writes:

"German Chancellor Angela Merkel has been praising Turkey's level-headed position in the Syrian conflict. If Turkey now requests Patriots it would be an opportunity to follow up this verbal acknowledgment with deeds. The decision would also make it easier for the allies to demand concessions from Ankara on other issues where Ankara has been a difficult partner -- such as Cyprus."

"NATO's Supreme Allied Commander will stress the purely defensive nature of the deployment when he gives his marching orders. That too will be an unmistakable call on Ankara to continue to show restraint. Such caution is warranted. Perhaps the Turkish government has plans that go beyond securing its borders. The German opposition is speculating that Turkey wants to set up a no-fly zone in northern Syria. It could guarantee the rebels protection from the Syrian air force. The Patriots could, some are speculating, end up enforcing a no-fly zone."

"The German government thinks it will be able to prevent this. A United Nations mandate would be needed for a no-fly zone. But that is hardly conceivable given Russia's and China's support for the government in Damascus. If, however, a UN resolution on a no-fly zone were to come about unexpectedly and the Patriots were called on to help enforce it, Germany would have to be involved. To make the missiles available now but then to withdraw from the responsibility for implementing the UN mandate -- that would be inconceivable."

"The decision to station the missiles is a tough one for everyone. Experience shows that it is relatively easy to be drawn into a military engagement but that a withdrawal can be difficult. Regarding the Patriots, one can say that the risks seem manageable. In the end, it comes down to the question whether Germany is a reliable alliance partner. Solidarity shouldn't be shown at any cost. But in the case of the Patriots, a 'No' would seriously damage Germany's reputation."

Conservative Frankfurter Allgemeine Zeitung writes:

"Turkey is a member of NATO, it is a security partner of Germany and is entitled to solidarity. So if the government in Ankara requests that NATO station air defense missiles at the border with Syria, then Turkey is entitled to this request being checked in the spirit of alliance solidarity. The apocalyptic scenarios being painted by parts of the German opposition are inappropriate and miss the point. If German troops, meaning operating crews for two defense squadrons, are deployed in Turkey, they won't automatically be pulled into the Syrian civil war."

"At the moment the Middle East consists of many powder kegs with even more fuses. The region is in upheaval -- and Turkey, as Syria's neighbor, is directly affected. In this situation, solidarity should mean something."

Mass-circulation Bild writes:

"If the Turkish government asks NATO for support, we must help. An alliance is an alliance. You can't simply get out if things get uncomfortable. We should also be honest in another respect. The German army won't be deployed at the Turkish border to build bridges or repair school roofs. A war is looming there. A German army mission in this highly explosive region means that German soldiers may have to kill to protect Turkish territory. And that there may be deaths and injuries among our troops. The German government must state this clearly. Because we are entitled to the truth -- even if the truth is difficult."

Conservative Die Welt writes that in the end, the West will have to get militarily involved in Syria:

"The longer we wait, the more difficult and costly the intervention, inevitable in the end, will be."

"Enforcing a no-fly zone and setting up security zones for civilian refugees will be the immediate goal of a Western intervention. And until that happens, the stated readiness of Germany and the EU as a whole to take in Syrian refugees and give them a face and a public voice here would be a strong signal of solidarity in their desperate fight for dignity."

-- David Crossland

**********

U.S. still not ready to fully embrace Syrian opposition

By Agence France-PresseMonday, November 19, 2012 17:50 EST

WASHINGTON — The United States said Monday it is closely monitoring the progress of a new Syrian opposition alliance as it weighs whether to recognize the body as the sole representative of the Syrian people.

“We’re obviously looking at this day by day, week by week. We’re getting to know them better. We’re encouraging them to make more progress,” said State Department spokeswoman Victoria Nuland.

“But we will see how things go over the coming weeks.”

European Union foreign ministers on Monday said they viewed the just-formed National Coalition as “legitimate representatives” of Syria’s people.

But a statement from the bloc’s 27 ministers after a day of talks did not go as far as France, which last week recognized the coalition as the sole representative of the Syrian people and is mulling accepting an ambassador.

Acknowledging that Washington was a step behind France, Nuland reiterated: “We see this group as a legitimate representative of the people.”

It must now “take the next steps to strengthen its organizational structure, to demonstrate its effective outreach to groups on the ground,” she said.

“We are continuing to look at what’s appropriate in terms of our diplomatic engagement with them,” she added.

BOGOTÁ, Colombia — Colombia’s main rebel group announced a unilateral two-month cease-fire on Monday, as guerrilla representatives sat down with government negotiators in Havana for peace talks aimed at ending a nearly 50-year war.

The government did not immediately respond to the cease-fire announcement.

President Juan Manuel Santos has repeatedly said that his government would not declare a truce during negotiations with the group, the Revolutionary Armed Forces of Colombia, known as the FARC. He hopes to avoid mistakes made in an earlier round of talks that ended in 2002, in which the FARC used a lengthy truce to gain strength.

The two-month cease-fire was announced by the head of the FARC negotiating team, Iván Márquez.

Reading a communiqué, he said all guerrilla units in Colombia were ordered to stop offensive military activities, including the sabotage of infrastructure, beginning Tuesday and lasting until Jan. 20.

The communiqué, which was posted on the FARC’s Web site, said that the cease-fire pledge was meant to “strengthen the climate of understanding necessary so that the parties that are starting the dialogue achieve the purpose desired by all Colombians.”

The government’s head negotiator, Humberto de la Calle, said before leaving Bogotá for Havana on Sunday that “there will be no concessions of a military character nor a cease-fire.”

He added, “We are aware of the pain and anguish caused by the conflict, but in the past, the cease-fire has created advantages for the guerrillas that cannot be repeated.”

The peace talks got off to an official start in Oslo last month, when negotiators met to agree on basic rules for the negotiations. The talks in Havana on Monday were the first to focus on an agenda of five points that the two sides previously agreed would serve as the outline for an eventual settlement.

Rural development leads the agenda. The conflict in Colombia had its origins in the unequal distribution of land in rural areas and the economic disadvantages of poor farmers.

The other four points include participation in the political process by demobilized guerrillas; an end to the fighting, including the laying down of arms by the guerrillas; drug trafficking; and the rights of victims of the conflict.

Defense Minister Juan Carlos Pinzón on Monday dismissed the truce and said the military would “continue working with full decision to pursue these individuals.”

After abolishing automatic voter registration, the Hungarian Parliament is expected to approve a bill restricting media time allotted to parties during the 2014 elections. This is seen as another indication that the government of conservative PM Viktor Orbán is installing a system aimed at eliminating all competition to his Fidesz party.

Fidesz has accomplished its unorthodox mission: it has created an electoral system so complex, that the party has become difficult to replace. This system also guarantees that, should the rulers stay in play, they can continue their nonsensical adventure with the least possible amount of democratic legitimacy. The collateral damage is the resulting "Catch 14" [a blend of the inextricable absurdity of Joseph's Heller's Catch 22 and 2014, date of the elections]. Yet, if a change does occur – which is improbable at this point in time – the destroyed political structure will make the country ungovernable for the new leaders.

The changes to electoral laws, such as the abolition of automatic voter registration, introduced by the managers of the "Orange Plan" [a reference to the Fidesz party colour] were motivated by a single thought: to exclude voters with a less developed political conscience. But, and this is an open secret, it is mostly the poor levels of society, whose condition was impossible before and is now unbearable, who will fail to vote because they have neither the strength nor the information needed to launch into the registration procedure.

It is revealing that even László Sólyom [President from 2005 to 2010], who you could consider, even if under the influence of mind-altering drugs, as a thinker affiliated to the international left, said that he considered the pre-registration requirement as a test of constitutionality. And, as if the pre-registration were not enough, they are now passing a new law that forbids political parties from campaigning on commercial radio and television stations as well as on Internet news sites. This is so that the advertisements in these media will not disturb the public.

The Catch 22

To make things more confusing, there is no sign, for the moment, that the elections will even really be held in 2014 given the current legislation. Even the state of the Greek economy is more stable than the rule of law in the Fidesz. It is a party constantly taking the pulse of its target voters and intervening as soon as there is a sign that the opposition might score a victory.

In the spring of 2010 – and this is not a secret – the texts that described in detail the future according to Orbán made us smile and it was with a sigh that we passed on those that predicted autocracy. Well, it is time for us to write our letters of apology. Yet, according to the rhetoric that has characterised Fidesz over the past 10 years, we could not imagine that it would be cowardice that would determine the government's actions. Yet, those that postpone being tested live in fear. If those in power were sure of aspiring to the public good and that their activities were useful to society, they would not be afraid to confront their opponents according to the tried and true rules of the game. But this party rigs the rules before getting into the ring.

Orbán and his team have pushed the country into this "Catch 14", a bind out of which there is an only slighter chance of escape than in the Catch 22 version.

Good job, lads!

Context: A law made to order

The law expected to pass on November 19 in the Hungarian Parliament ensures "equality of treatment" for all parties in the 2014 election, says Hungarian weekly Heti Világgazdaság with a touch of irony. The magazine agrees with many observers that the laws proposed by the government have but a single goal: to allow Fidesz, the ruling party of PM Viktor Orbán, to maintain its advantage.

The bill will shorten the campaign period to 50 days from the current 60 days. Advertising for parties will be banned from private media and news web sites. Only public media will be allowed to carry campaign spots, for free, according to regulations established by an electoral commission whose members are appointed, for 9 years, by the parliament in which the Fidesz has a two-thirds majority.

Speaking times are limited to a total of 10 hours for the entire campaign on all of the four television stations and three radio stations. This breaks down to 12 and a half minutes per day for all parties combined.

Billboards and other public displays are unrestricted but must be paid for. And as Slovak daily Pravda has noted, the sector is dominated by a firm whose owner, Lajos Simicska, is close to Fidesz.

The acquittal of General Gotovina and General Markač by the International Criminal Tribunal for the former Yugoslavia salvages the honour of Croatia, but does not erase all the questions about the country's recent past, writes the national press. In Serbia, on the other hand, the news has not been well received.

Accused of war crimes and crimes against humanity but considered heroes in their own countries, the two Croatian generals Ante Gotovina and Mladen Markač were acquitted on 16 November by the appeals chamber of the International Criminal Tribunal for the former Yugoslavia. Initially sentenced to 24 years and 18 years in prison for their actions in August 1995 during the expulsion of the Serbian population of the Krajina region of Croatia, then a self-proclaimed Serb republic, this time around the judges ruled they had not deliberately targeted civilians and that they had not implemented a deliberate plan of ethnic cleansing.

This highly anticipated verdict in Croatia leaves “no room for euphoria”, however, writes Novi List. The Rijeka daily recalls that the arrest and extradition to The Hague of Gotovina, who had been in hiding, was the condition imposed by the EU for accession negotiations with Croatia. No discussion could take place before his arrest in December 2005. Today, explains Novi List –

... the acquittals of General Gotovina and General Markač will not erase the feeling that Croatia could have avoided the ordeal it passed through in the process of joining the EU. [...] The question is how, in four years, from the fall of Vukovar [in November 1991] until the reconquest of the Krajina, was Croatia able to switch from the status of victim to that of a potential aggressor. One must be honest: this is not the triumph of national myths and legends, as argued by those who once said that there can have been no crimes in the war of liberation of the country, or those who lied, supposedly in the interest of Croatia, by refusing to prosecute those who committed crimes in its name.

The verdict of the Hague tribunal proves untrue the conspiracy theories put forward by the far right, which holds this institution to be a tool of an imperialist British policy that tried to put all the crimes on the same plane, and for whom General Gotovina was a victim. If he had not gone into hiding for four years, Croatia would have got into the European Union much more easily. But now that it’s over, we wish him as speedy a return as possible to normal life after 11 years in hiding and in prison.

In wrapping up this business, and in a manner that is beneficial to Croatia, the verdict delivered by the ICTY, “although it will probably not promote investment in Croatia, could contribute to a more optimistic business climate”, argues the front-page report in Poslovni Dnevnik. The business daily points out that –

Political and economic relations with Serbia are developing and are not expected to worsen.

In Belgrade, Politika remarks that “the acquittal of generals Gotovina and Markač by the ICTY will have less impact on relations between Serbia and Croatia than on relations in the region, and Serbian attitudes to European integration”. For the daily –

It sends a poor message for the reconciliation process in the region because it shows disdain for the victims and refugees who, almost 20 years after the war, have yet to succeed in returning to Croatia.

For the popular daily Blic, “the shame of the The Hague will widen the rift between Europe” and the Serbs, because as the political scientist Predrag Simić, who is quoted by Politika, points out the acquittal of the generals will enable a Croatia that is “absolved of all of its sins” to enter into the EU. However, on the other hand –

… the Hague verdict will further undermine the drive for European integration in Serbia (where support for accession has sunk below 50%) and complicate negotiations with Kosovo. The verdict is not good news for Serbia, or for the EU, or for international law.

The campaign for Romania's December 9 legislative elections is dominated by discussions over the 2014-2020 European Union budget. Following yet another row over whether Prime Minister Victor Ponta or President Traian Băsescu will would attend the November 22-23 European Council meeting (Băsescu, in the end), both also bickered over whether or not to veto the EU budget. Ponta is in favour of such a move if Romania's EU funding is cut but Băsescu disagrees.

If Romanian leaders wanted to do something useful, "they would have found measures ensuring that Romania spends the EU's billions efficiently," suggests Romanian daily Adevărul. But Romania, for which the 2007-2013 budget earmarked 19.66 billion euros in European funds, is at the bottom of the list as concerns their use, the paper notes, adding that, under the Băsescu presidency, Bucharest –

... has achieved a glorious actual absorption rate of 4% and 10% on paper. The Bulgarians have outstripped us and the Poles could even mock us, if they did not fear that Romania's negative record might lead the countries of Western Europe to decide to substantially reduce the amount of the cohesion funds.

Adevărul wonders how much it will cost Romania to export its domestic political quarrels –

Romania has become a bad example for Europe and is used by interested countries to prove that the money of the wealthy must no longer be spent to reduce the gap between the developed and the lesser-developed states. Adopting a policy of reducing the budgets at the next European Council is, in fact, a blow to the idea of a more integrated, stronger Europe.

For the paper, the failure to negotiate an acceptable EU budget would signify the end of Romania's chances to reduce the gaps or to approach "Old Europe's" standards of prosperity.

Moody's on Monday slashed France's top credit rating, becoming just the latest institution to cast doubt on the country's ability to reform its inflexible labor market and boost growth. French President François Hollande has promised change, but markets have yet to be convinced.

It turns out that French voters aren't the only ones who have begun to doubt President François Hollande. On Monday evening, the ratings agency Moody's also expressed concern about the path on which France currently finds itself as it attempts navigates its way through the uncompromising euro crisis. Moody's announced that it was downgrading French debt by a notch, becoming the second ratings agency after Standard & Poor's to revoke the country's AAA top rating. Like S&P, Moody's long-term outlook on French debt is negative.

The move highlights concerns that France, rather than Spain or Italy, could be the true danger lurking in the heart of the euro zone. And worries that Hollande, who has shown only half-hearted interest in pursuing far-reaching economic reform, might not have the political backing necessary to modernize the country's economy. Indeed, a poll released by the newspaper Le Journal du Dimanche on Sunday indicated that Hollande's popularity has now decreased for six months in a row and stands at just 41 percent.

In downgrading French debt, Moody's highlighted a host of challenges facing the country's economy, focusing specifically on what the agency called "multiple structural challenges, including its gradual, sustained loss of competitiveness and the long-standing rigidities of its labor, goods and service markets."

In addition, Moody's pointed to sluggish economic growth in France. The economy posted a surprising upward tick of 0.2 percent in the third quarter of 2012, but the outlook remains grim, with the International Monetary Fund forecasting minimal growth next year, hardly enough to relieve the country of its persistent budget deficit. Hollande has pledged to reduce the deficit from its current level of 4.5 percent to 3 percent next year and earlier this autumn passed what has been described as France's harshest budget in 30 years. But his government has also forecast 2013 growth of 0.8 percent, much higher than what most experts expect, making it seem unlikely that he will achieve his budgetary targets.

'Overly Optimistic'

Analysts at Moody's are also skeptical of the French government's growth expectations. "The rating agency considers the GDP growth assumptions of 0.8 percent in 2013 and 2.0 percent from 2014 onwards to be overly optimistic," the agency wrote in its report.

More to the point, however, are the structural problems facing the country. In a special report in its current issue, newsmagazine The Economist highlighted many of them. In particular, the magazine noted that the public sector in the country is bloated, consuming some 57 percent of France's gross domestic product, and debt has skyrocketed in recent decades from 22 percent of GDP in 1981 to over 90 percent today.

Moody's echoed the magazine by highlighting many of the rigidities in the French labor market in justifying its downgrade. It is "characterized by a high degree of segmentation as a result of significant employment protection legislation," the ratings agency writes. Combined with other factors, the result is a lack of innovation and competitiveness and persistently high unemployment.

Hollande has noted the need to boost growth and indeed has been one of the primary critics of German Chancellor Angela Merkel's focus on austerity as a way to combat the euro crisis. But the French president has not made labor market reform a priority. Though he has promised to push through measures to improve flexibility, he has also passed a number of new laws that would seem to counter that pledge. In addition to raising taxes on the country's top earners and on businesses, he has also pushed through a higher minimum wage and reversed a planned increase to the retirement age.

Poor Track Record

Even the International Monetary Fund is worried. In a report released earlier this month, the IMF noted that France's "loss of competitiveness predates the crisis, but risks becoming even more severe if the French economy does not adapt along with its major trading partners in Europe, notably Italy and Spain which, following Germany, are now engaged in deep reforms of their labor markets and service sectors."

In responding to the Moody's downgrade, the Hollande administration appeared to be pointing the fingers at former President Nicolas Sarkozy. French Finance Minister Pierre Moscovici said on Monday night that the downgrade reflects inaction on the part of the country's previous government. On Tuesday, he went even further. "The rating change does not call into question the economic fundamentals of our country, the efforts undertaken by the government or our creditworthiness," he said.

It is a sweeping denial and serves to conceal the fact that Moody's actually would seem to have little faith that France will rapidly change direction. "Moody's recognizes that the government recently announced measures intended to address some of (the) structural challenges (facing the country)," the ratings agency wrote. "However, those measures alone are unlikely to be sufficiently far-reaching to restore competitiveness. And Moody's notes that the track record of successive French governments in effecting such measures over the past two decades has been poor."

As a poll shows 56% of Britons in favour of a straight EU exit, the British Sunday newspaper argues that the consequences of such a withdrawal would be dire.

Britain appears to be almost inexorably set on a course that will see it cease to be a full member of the European Union. Today's Observer opinion poll, suggesting that, offered a choice in a straight in/out referendum, a two-to-one majority of Britons would be inclined to leave is but another indicator of the strength of anti-European feeling. It is now almost certain that both of Britain's principal political parties will feel obliged to offer such a referendum in their manifestos for the next parliament, triggered by the Tories' anxiety to defend their flank against Ukip and Labour's need to match them to appease the wave of Euroscepticism. Unless Europe suddenly becomes more attractive or pro-Europeans can make a stronger argument, the result of any referendum could look inevitable.

The only qualification to that assumption might come from either party in government being able to offer the referendum on a renegotiated relationship with more powers ceded to Britain. On that thin reed, dependent on the goodwill of European states who no longer trust Britain's interest in building Europe, hangs our European future. We will either be a semi-detached member – or not a member at all.

The likelihood of a complete exit will be brought one step nearer by this week's European summit, where 27 states are trying to agree the EU's budget for the next seven years. Agricultural spending used to account for the lion's share of European spending; now, the bulk of expenditure goes towards the infrastructure of poorer members, on research and development, and on the implementation of pan-European initiatives such as the proposed banking union. A freeze in spending, given the acute needs of southern and eastern Europe, is unlikely; probably the other 26 will settle on a small, real-terms increase.

Britain will not concur. David Cameron, locked between his own increasingly confident Tory backbench Eurosceptics and an opportunistic Labour party that has put tactical advantage before principle, knows that he cannot get such a deal through Parliament, nor can it survive the hysterical scrutiny of the overwhelmingly centre-right Eurosceptic media. He will be compelled to veto the deal, entrenching the distrust between Britain and its European neighbours, and making any concessions even to win a referendum on a semi-detached relationship much less likely.

This week, euro-zone finance ministers are expected to wrangle over fresh aid for Greece, and German taxpayers may be directly burdened for the very first time in the currency crisis. Politicians within Angela Merkel's conservative CDU and its junior coalition partners are demanding greater transparency from the government.

In Berlin, concerns have become widespread this week that, for first time since the start of the Greek crisis, German taxpayers may soon get stuck with a real bill for the debt disaster in Athens -- at least if, as many are suggesting, a second debt haircut is imminent. Were the Greek government to partially default on debt held by European public sector creditors, it would mean that Germany would have to write off some of the aid that has already been transferred to Greece.

It is a potentiality that has many in German parliament concerned, particularly those from parties that comprise Chancellor Angela Merkel's coalition government.

The situation is expected to come to a head on Tuesday, when euro-zone finance ministers meet in Brussels. A number of possible measures are to be discussed and it remains unclear if Greece's creditor countries will be able to reach agreement. German Finance Minister Wolfgang Schäuble of Merkel's conservative Christian Democratic Union (CDU) party, has so far rejected a debt haircut that would come at the expense of German taxpayers. But the messages from German leaders have also been conflicting. Germany's representative on the European Commission, Günther Oettinger, recently declared: "At the end of the day, we will not be able to avoid a debt haircut involving Greece's public creditors."

Schäuble and Merkel are trying to use other measures in order to buy time. Speculation has circulated in recent days over the possibility of interest rebates, which would come at the expense of creditors, or even interest-free loans for Greece. It would essentially be a cash gift to Athens that would come at the expense of the German federal budget and taxpayers. Currently, Germany is profiting from the emergency loans to Greece -- the interest rate Athens pays on the loans is far higher than the rate Germany must pay on sovereign bond sales. By the end of 2011, Athens had paid Germany some €380 million ($485 million) in interest payments. Should Berlin forgo such interest payments in the future?

The problem is growing more urgent. The two-year extension in the deadline for Greece to implement reforms as foreseen in the troika report released last week will create a new shortfall in the Greek budget of €33 billion. It is now up to the euro-zone finance ministers to decide how to close this gap.

Once a decision has been made, Merkel's government is expected to inform parliament in Berlin. But concerns are growing among parliamentarians from the CDU and its coalition partner, the business-friendly Free Democratic Party (FDP), that the government isn't being entirely honest and that it is playing down the risks. "There will probably be another agreement on new Greek aid," said Lars Lindemann, a member of parliament with the FDP. "But before we do that, we should put an end to this era of trying to hide the truth and instead be honest to the people and say: Yes, this is going to come out of our budget."

Faith Is Diminishing

The Greece problem has been exacerbated in recent days through the conflict between the European Union and the International Monetary Fund (IMF). At the core of the dispute is the question of whether Athens will be able to succeed in reducing its debt level to 120 percent of gross domestic product by 2020 from the current level of 177 percent. The IMF is pleading for debt forgiveness, whereas Schäuble is calling for a mix of other measures to be deployed. The German government's goal is clear: With 2013 being an election year in Germany, it wants to shield the budget from dangers associated with the euro crisis.

Wolfgang Bosbach, a member of the CDU who is also a critic of Merkel's euro bailout policies, is skeptical of the government's position. "If the position remains, 'Greece must stay in the euro under all circumstances, regardless what it costs,' then it will be harder and harder to believe that taxpayers will not ultimately be burdened." Klaus-Peter Willsch, also a member of parliament with the CDU, has calculated that Germany has already deployed €127.9 billion in Greek aid. "The amount that has already been paid out -- and not just approved -- is €93.67 billion. We will have to write off the majority of this money," he believes. Willsch has been calling for Greece to leave the euro zone for some time now. He sees the discussion over the interest rate Greece must pay as little more than "lost time."

Indeed, buying time seems to be the course Greece's creditors are likely to agree on. One measure being discussed is for Greece to obtain a loan from the permanent euro bailout fund, the European Stability Mechanism (ESM), in order to buy back some of its debt. The advantage is clear: These bonds are today only worth about one-quarter of their face value. The German Finance Ministry has calculated that this would be sufficient to reduce Athens' debt burden by up to €40 billion. But it would still just be limited relief given that Greece has racked up around €340 billion in sovereign debt. But a debt haircut could get very expensive for Germany.

Calls for a Special Budget for Euro Aid

CDU leaders are currently trying to keep the coalition government in line. "The German parliament is deeply involved in all European policy issues," said Stefan Müller, a leading parliamentarian from the Christian Social Union (CSU), the Bavarian sister party to Merkel's CDU. "It is our job to keep risks for German taxpayers as low as possible. That obviously also includes speaking openly and honestly about the existing risks."

Meanwhile, Norbert Barthle, the budget policy spokesman for conservatives in parliament, insisted: "We are being honest and are doing everything we can to prevent real costs for taxpayers." With the exception of financial transactions for the European Investment Bank (EIB) and ESM, he said he could identify no direct burdens for the German budget.

He noted that Germany planned to use part of its 2013 budget to increase the capital available to the EIB, the EU's investment arm, by €1.6 billion. Meanwhile, he said that the German share of ESM's capital stock of €80 billion will add up to €22 billion between now and 2014. In contrast to the billions in credit guarantees being provided for different euro bailout programs, those funds would be paid directly out of the German budget.

Many members of Germany's parliament, particularly those who do not follow the euro policies on a daily basis, are getting confused by their complexity. And many are now calling for greater transparency -- before the next bailout is necessary. "The Greek loan losses are already a reality, they just haven't been registered in the budget yet," said Frank Schäffler, a prominent critic of the euro with the FDP. "To try to disguise them using bookkeeping tricks is a violation of the principles of budgetary accuracy and clarity."

Indeed displeasure over how the government is dealing with the aid for Greece is spreading beyond the usual euro critics within Merkel's coalition. "(Finance Minister) Schäuble should really have to account for the aid to Greece and the euro crisis countries in a separate budget within the federal budget that is clearly recognizable. Few members of parliament would be in a position today to say how much money has already been made available and what, concretely, is still yet to come."

With additional reporting by Annett Meiritz

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SPIEGEL ONLINE11/19/2012 07:15 PM

Greek Haircut: Germany's Trouble With the Truth

A Commentary By Stefan Kaiser

It's supposed to be a week of decisions for Greece, but of course it will just be another week of muddling ahead. Fearing her voters in Germany, Merkel's government will resist a debt haircut and the inevitable realization: We're all going to have to pay for Greece.

At some point, even the best tricks -- the aimless chatter of "other solutions," the putting-off of painful decisions -- don't help any longer. At some point, Greece's rescuers in Berlin, Brussels or Paris will have to admit that saving the country is going to cost a lot of money. That is, billions of euros, short more than just interest when it is paid back, as the German government has wanted to make its citizens believe so far. No, the money will simply be a loss for Germany and the other creditor nations. They'll have to make it up some other way, such as raising taxes or cutting expenditures.

There's just one problem, though. This moment of insight and clarity is still a long way off. For the time being, it seems as though the euro-zone countries are just going to keep carrying along as they have been. That is, muddling onward and delaying reality for as long as possible. Angela Merkel is the master of this strategy. The German chancellor wants to push back Greece's necessary payday by at least 10 months. That's because she hopes to be re-elected in the fall of 2013. And in a political campaign, broken promises and billions worth of outstanding credit aren't very popular.

That means when the euro finance ministers meet on Tuesday to free up the next tranche of Greece's second rescue package, they will only resolve as much as is absolutely necessary to get through the next months. They would also rather not have to ask the question as to where the additional nearly €33 billion that it's going to cost by allowing Greece to push back its savings targets again is supposed to come from. And they're less willing than ever to think about long-term solutions, like a debt haircut. But this is cowardly and dishonest. Citizens are only going to grow angrier with their politicians.

Hope Rests On the IMF

The displeasure is already enormous. And it's due not only to the indebted Greeks but also to the German government. Merkel and her coalition partners have long neglected to explain to the people why it makes sense to step in for Europe and Greece. Like no other government, Germany has stirred up sentiment against Greece and produced arguments about how important it is to be tough on countries in debt. Now it will be that much more difficult for Germany to explain why it all of a sudden makes sense to give money to the very same places.

The only hope for an end to this mess is the International Monetary Fund (IMF), which obviously takes its principles seriously. For example, the IMF may only give money to indebted countries if they can foreseeably repay the credit and, at the end of the lending program, be able to look out for themselves once more.

But this is exactly what Greece cannot do. By all economic logic, the country won't be able to reduce its debt load to 120 percent of its gross domestic product (GDP)by 2020 as planned. At the moment, the country's debt burden lies around 177 percent, and by 2014 it will even be up to 190 percent. To recover from such monumental numbers, neither lowering interest rates for old credit nor other tricks that the government is suggesting will work. It will actually take either a gigantic economic boom or a so-called debt haircut. This means that the creditors, chief among them the euro countries, would have to release Greece from a big segment of its debts.

As there isn't an economic boom anywhere in sight, another haircut is going to be the only way out. At least, that's how the IMF and virtually every serious economist sees it. Only the politicians responsible for the situation want to see it otherwise. There is no way around it, though. Germany and the other creditor countries will have to pay for Greece. Whether it's called a haircut, bankruptcy, debt forgiveness or a transfer is irrelevant. The only important thing now is that the policymakers find the courage to reveal the truth to their people.

With both hands holding the basket of human excrement on her head, widowed grandmother Kela walks through a stream of sewage, up a mound of waste and then dumps the filth while cursing.

“Nobody even pays us a decent wage!” she spits as she rakes mud and rubbish over her newly deposited pile, one of several she drops in the course of her working day cleaning toilets as a “manual scavenger” in India.

She and around 20 other women in the village of Nekpur, 60 kilometres (40 miles) from New Delhi but a world away from its relative wealth, remove the contents of toilets daily using just their hands and a plastic shovel.

Already illegal under a largely ineffective 1993 law, the government has promised to have another go at stamping out the practice with new legislation set to come up in the last parliament session of the year, which opens this week.

Kela and her fellow scavengers in Nekpur live in a handful of mud houses, isolated from the rest of the village. They are considered low-caste even by fellow low-caste Hindus and are seen as the ultimate “untouchables”.

Discrimination has eased recently but still they are prevented from keeping livestock and are sometimes stopped from walking near powerful people.

“My life has passed doing this,” Kela, a withered illiterate woman thought to be around 60, explained to AFP.

She started after she married — she thinks she was aged 11 or 12, but can’t be sure — and is in no doubt about the undignified nature of her profession.

“The smell goes to your head. I often feel sick. After all, we are also humans.”

One of the homes she visited was Parveen’s, a widowed mother whose small brick construction and concrete yard is home to nine people and three generations.

The toilet — a brick wall around a hole above a pit containing ash and dirt — is emptied from an access point outside on the street, where Kela scoops out the “night soil” into her wicker basket.

“We feel bad about it,” says Parveen when asked about the women’s plight. “We pity these women and sometimes we try to help them.”

She says she pays Kela one piece of bread (a chapati) a day and five kilogrammes of food grains a month. No money is exchanged, as is the case for other scavengers.

Nekpur, a few hours bumpy drive from Delhi, is the sort of rural backwater found in Northern India where the estimated 200,000 scavengers nationwide continue to toil.

Swarms of mosquitoes hover above open drains as naked or barely clothed children play on the streets. Buffaloes outnumber vehicles in the streets.

The new legislation modifies the 1993 law — which criminalised the scavengers — raising the prospect of an end to a practice seen as a medieval throwback with no place in modernising India.

The new law would prohibit the building of non-flushing toilets that must be emptied by hand, and prescribes a one-year jail term and/or a fine of up to 50,000 rupees (900 dollars) for anyone who employs a manual scavenger.

It also requires local authorities to monitor the implementation of the law and sets out tough sanctions if municipalities employ sewer cleaners without protective gear and equipment.

Men wearing only underpants and equipped with just a hoe and a wooden bar can still be found in some towns heading into the stinky depths of septic tanks and sewers.

The national railways — described recently as “the largest open toilet in the world” by a federal minister — are also often picked clean by the scavengers.

Bindeshwar Pathak, of the sanitation charity Sulabh International, says the legislation could prove helpful, but that the final test will be on the ground.

“In India there are many laws that have not helped so far, like (the one to prevent) dowry. Dowry cases are still going on, there is child labour,” he said.

“It needs to go both ways: on one hand, the legislation, the other is implementation.”

He says there has not been a single successful prosecution under the 1993 Act.

Other activists say public funds intended to retrain scavengers are held back because of bureaucratic inertia or corruption.

“In our democracy, it’s a numbers game. If a community is small, no-one cares for them,” said Vidya Rawat, director of the Delhi-based Social Development Foundation, which works with scavengers.

He says the only solution is for the government to find jobs for the scavengers, requiring an extension of a vast affirmative action programme which reserves positions for the low-castes and marginalised tribes.

“Rehabilitation programmes don’t work,” he added. “If a community woman leaves her work and opts to open a tea shop, no one will go to drink at her place.”

The persistence of manual scavenging can be traced to deep-rooted factors which continue to afflict India despite three decades of high economic growth.

Caste-based discrimination and the notion of “untouchability” in rural India persists more than 60 years after independence hero Mahatma Gandhi called it the “greatest blot upon Hinduism”.

Manual scavenging also points to the lack of investment in modern sewerage systems by a weak state which struggles to provide basic services.

A 2011 survey by the Central Pollution Control Board revealed only 160 out of nearly 8,000 towns had sewerage systems and a sewage treatment plant.

But the women in Nekpur are among the lucky ones in their profession, however, benefiting from a rehabilitation progamme with a chance of success.

Since AFP visited in June, they have been retrained by Sulabh and are now making soaps and candles, holding out hope that they and their children might escape a destiny of humiliation and disease.

November 20, 2012For Obama and Clinton, Their Final Tour in Asia as Partners

By PETER BAKERNYT

PHNOM PENH, Cambodia — They emerged from Air Force One together, side by side, smiling at the crowd waiting on the tarmac below. Then as they headed down the stairs, she held back just a little so that she would stay a step behind him.

For President Obama and Secretary of State Hillary Rodham Clinton, this week’s trip to Southeast Asia is to be their last foreign adventure together in office, an intriguing, sometimes awkward closing road show that is nostalgic over a partnership at an end yet hints at a future ripe with possibility.

Four years after their cage-match battle for the presidency, the rivals-turned-allies proved a more compatible team than either might have imagined when Mrs. Clinton first accepted his invitation to join the cabinet. Though not exactly close friends, they developed a working relationship of respect, one in which Mr. Obama gave her the freedom to roam the world while she strategically deferred to him in ways small and large as she carried out his policies and shaped her own.

Even as they spent the last few days traveling through Asia together, they were teaming up to try to defuse the escalating conflict in the Middle East. After multiple consultations, they decided on Tuesday that she should leave immediately for the region on a mission to stem the violence.

The new mission came after the two devoted their last scheduled trip together to one of Mrs. Clinton’s signature initiatives, the administration’s “pivot to Asia,” a strengthening of United States strategic, security and economic ties in the Asia-Pacific region. It was a project they shared and advanced during Mr. Obama’s three-country trip that included two nations never before visited by an American president, Myanmar and Cambodia.

Now as the president prepares to begin his second term, the secretary is stepping down, bone weary, according to aides, and ready for an extended rest after nearly a million miles of globe-trotting. She has waxed about the days not far off when she can relax, read a book and even travel just for pleasure. But many on Air Force One these last few days, not least the president himself, expect her to be back after a rest, making a bid to succeed him in 2016 and redefining their relationship once again.

As the last day of the trip arrived on Tuesday morning, Mrs. Clinton reflected briefly. “It’s been great,” she told reporters who stopped her in a hotel before heading out to summit meetings. “It’s been bittersweet, nostalgic, all the things you would expect.”

Mr. Obama, too, has seemed to focus on the journey’s nature of finality, making a point of praising Mrs. Clinton publicly as they have jetted across Southeast Asia. They met up in Thailand and then traveled together on Monday to Myanmar and finally here to Cambodia. Along the way, they teamed up to meet with premiers and potentates, tour an ancient golden pagoda and chat with a Buddhist monk about budget deficits and maybe even presidential politics.

On the porch of the house of Myanmar’s opposition leader, Daw Aung San Suu Kyi, Mr. Obama gave Mrs. Clinton a shout-out.

“Where did Hillary go?” he suddenly asked as he interrupted his remarks about Myanmar’s transition from military rule. “Where is she?”

She caught his attention from the audience. “There she is,” he said to applause.

“I could not be more grateful,” he went on, “not only for your service, Hillary, but also for the powerful message that you and Aung San Suu Kyi send about the importance of women — and men — everywhere embracing and promoting democratic values and human rights.”

Mrs. Clinton, as is her style, has kept publicly quiet during the trip, leaving the president the stage while she has largely remained behind the scenes or in the audience. When the two arrived at Ms. Aung San Suu Kyi’s house, she hung back while Mr. Obama emerged from the limousine to be greeted.

And yet at times, her deeper experience in remote places around the world like this is palpable. After Ms. Aung San Suu Kyi shook Mr. Obama’s hand and began to draw him inside the house, she abruptly stopped as if remembering, turned around to look for Mrs. Clinton and then rushed over to give her a warm embrace. While Mrs. Clinton was seen as an old friend, Mr. Obama later appeared to mispronounce Ms. Aung San Suu Kyi’s name; she flinched but later hugged him.

Likewise, when Mr. Obama and Mrs. Clinton paid a courtesy call on the hospitalized King Bhumibol Adulyadej of Thailand, the secretary held back while the president advanced. “Your Majesty,” Mr. Obama said as he grasped the king’s hand. “It’s a great honor.”

Only then did Mrs. Clinton approach, but again with much greater familiarity. “Hello again,” she said. “It’s so good to see you again. And my husband sends you his very best regards.”

The king handed Mr. Obama some gifts, including a red box. “This is beautiful,” the president responded looking at something inside that could not be seen by reporters. “Thank you so much. This is lovely.”

An American woman next to Mrs. Clinton indicated that the gift was for Michelle Obama.

“She’ll look very good in that color, Mr. President,” Mrs. Clinton offered.

Thick in the air, if largely unspoken, was the question of Mrs. Clinton’s future. When the president and secretary went to the Wat Pho Royal Monastery in Bangkok to look at the famed Reclining Buddha, a monk told Mr. Obama that the statue was a symbol of success and would bring him a third term were he allowed to run. The Thai newspaper The Nation reported that the president pointed to Mrs. Clinton and said she would be the next president. Aides to both denied that, suggesting that the monk, not the president, may have forecast Mrs. Clinton’s future.

Either way, as the end drew near, the past and future were on the minds of both. Mr. Obama took Mrs. Clinton and her entourage to lunch at the United States Embassy in Yangon, Myanmar, on Monday to thank them for their work.

Then during the Air Force One flight to Phnom Penh that night, an official said, the two huddled alone for an hour, reminiscing about the last four years — and talking about what the next may bring.

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November 18, 2012

To Reduce Inequality, Tax Wealth, Not Income

By DANIEL ALTMANNYT

WHETHER you’re in the 99 percent, the 47 percent or the 1 percent, inequality in America may threaten your future. Often decried for moral or social reasons, inequality imperils the economy, too; the International Monetary Fund recently warned that high income inequality could damage a country’s long-term growth. But the real menace for our long-term prosperity is not income inequality — it’s wealth inequality, which distorts access to economic opportunities.

Wealth inequality has worsened for two decades and is now at an extreme level. Replacing the income, estate and gift taxes with a progressive wealth tax would do much more to reduce it than any other tax plan being considered in Washington.

When economists try to measure inequality, they typically focus on income, because the data are most readily accessible. But income is not always a good gauge of economic power. Consider a group of people who all have high incomes but differ widely in their wealth. Who’s going to get into the country club? Who’s going to have the money to finance a new venture? Moreover, income data may not reveal the true economic power of people who are retired, or who receive their pay in securities like stocks and options or use complex strategies to avoid taxes.

Trends in the distribution of wealth can look very different from trends in incomes, because wealth is a measure of accumulated assets, not a flow over time. High earners add much more to their wealth every year than low earners. Over time, wealth inequality rises even as income inequality stays the same, and wealth inequality eventually becomes much more severe.

This is exactly what happened in the United States. A common statistical measure of inequality is the Gini coefficient, a number between 0 and 100 that rises with greater disparities. From the late 1970s through the early 1990s, the Census Bureau recorded Gini coefficients for income in the low 40s. Yet by 1992, the Gini coefficient for wealth had risen into the mid-70s, according to data from the Federal Reserve.

Since then, it has risen steadily, to about 80 as of 2010. In 1992, the top tenth of the population controlled 20 times the wealth controlled by the bottom half. By 2010, it was 65 times. Our graduated income-tax system redistributes a small amount of money every year but does little to slow the polarization of wealth.

These are stunning changes. The global financial crisis did make a dent in the assets of the wealthiest American families, but its effects for the bottom half were utterly destructive; the number of owner-occupied homes has fallen by more than a million since 2007. People in different socioeconomic strata are living ever more different lives, with dangerous results for society: erosion of empathy, widening of rifts and undermining of meritocracy.

American household wealth totaled more than $58 trillion in 2010. A flat wealth tax of just 1.5 percent on financial assets and other wealth like housing, cars and business ownership would have been more than enough to replace all the revenue of the income, estate and gift taxes, which amounted to about $833 billion after refunds. Brackets of, say, zero percent up to $500,000 in wealth, 1 percent for wealth between $500,000 and $1 million, and 2 percent for wealth above $1 million would probably have done the trick as well.

These tax rates would garner a small portion of the extra wealth America’s richest families could expect to accrue simply by investing what they already had. The rates would also be enough to slow — if not reverse — the increase in inequality. To see how the wealth tax would work, consider a family with $500,000 in wealth and $200,000 in annual income. Right now, they might pay $50,000 in federal income tax. With the wealth tax brackets described above, they would pay nothing. On the other hand, a family with $4 million in wealth and $200,000 in annual income would owe $65,000. Most families that depend on their wealth for their income would pay more, and most that depend on their earnings would pay less.

In fact, the majority of American families would receive an enormous tax cut. Some would owe only payroll taxes (for Social Security and Medicare) and state and local taxes every year, and others would pay less in wealth tax than they did in income tax. Taxes on earnings, capital gains, dividends and interest, all of which may distort decisions about working and investing, would disappear.

For most families, whose wealth may never reach $500,000, all disincentives to save would vanish. And families trying to accumulate a fixed amount of wealth for retirement or their children’s college fund could devote less of their incomes to saving, since in most cases the wealth tax would take a smaller bite of their interest, dividends and capital gains than the current income tax. Though the remaining minority of families subject to the wealth tax might end up saving less and spending more, this shift would also reduce inequality; the dollars they spent would be more likely to end up in the pockets of people with less wealth.

Scholars have recommended a wealth tax in the past, but not as a replacement for the income, estate and gift taxes. Indeed, phasing in the new tax would present some complications. People who already paid income tax on the money they used to buy their assets would not want to pay a new tax on them. Yet a reduced wealth tax — perhaps 1 percent in the top bracket to start — would collect less from many of them than the current income tax.

Naturally a cottage industry would spring up to help wealthy people lessen their exposure to the new tax. The federal government would need new rules for the reporting and valuation of assets, as well as new auditing processes. Levying the tax at the family level — perhaps parents and children up to a fixed age — might make it harder for the wealthy to reduce their tax liability by allocating their assets among multiple family members to reduce the wealth-tax liability.

By contrast, people with wealth tied up in property and small businesses might have real trouble coming up with enough cash to pay the tax. This is a problem that can be solved, or at least mitigated, by making payment periods flexible over several years. In addition, new financial products could offer cash for tax payments, either as loans or in return for partial ownership of assets — much like home equity loans do today.

States with income taxes would have to decide whether to switch to the wealth tax. Because some states collect tax from commuters who work within their borders but live elsewhere, an income tax might still be attractive. Yet rather than having two systems, it might be better to apportion state wealth taxes between the states where families live and work.

The benefits of the wealth tax would make these adjustments worthwhile. The economy would allocate opportunities more equitably and efficiently, and the tax system would become simpler. It would help working class people to realize their potential and ensure that society did not become unduly polarized. Of course, we can do much more to improve access to opportunity for all Americans. But a wealth tax would be a good place to start.

Daniel Altman, an adjunct associate professor of economics at the New York University Stern School of Business and a former member of the New York Times editorial board, is writing a book about what would happen if the United States defaulted on its debts.

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November 18, 2012

Investors Rush to Beat Threat of Higher Taxes

By NATHANIEL POPPER and NELSON D. SCHWARTZNYT

Business owners and investors are rapidly maneuvering to shield themselves from the prospect of higher taxes next year, a strategy that is sending ripples across Wall Street and broad areas of the economy.

Take Steve Wynn, the casino magnate, who has been a vocal critic of higher tax rates. He and his fellow shareholders in Wynn Resorts, the company announced, will collect a special dividend of $750 million on Tuesday, a payout timed to take advantage of current rates. Experts estimated that taking the payout this year instead of next could save Mr. Wynn, who owns a sizable stake in the company, more than $20 million.

For the wealthy like Mr. Wynn, the overriding goal is to record as much of their future income this year as they can. This includes moves as diverse as sales of businesses, one-time dividends and the sale of stocks that have been big winners.

“In my 30 years in practice, I’ve never seen such a flood of desire and action to transfer a business and cash out,” said Kenneth K. Bezozo, a partner in New York with the law firm Haynes and Boone. “We’re seeing a watershed event.”

Whether small business owners or individuals saving for retirement, investors are being urged by their advisers to reconsider their holdings. Along the way, many are shedding the very investments that have been the most popular over the last year, contributing to recent sell-offs in formerly high-flying shares like Apple and Amazon.

Investors typically take profits in their own portfolio at year-end, but the selling appears to be more targeted this year. Stocks with large dividends, for instance, are seen as less attractive because of the perceived likelihood of a sharp increase in the tax rate on dividends.

All this is weighing on the broader financial markets, as worries mount about the economic drag from the combination of higher tax rates and reduced government spending set for January if President Obama and Senate Republicans cannot reach a budget compromise before then.

Fears about the fiscal impasse in Washington, along with anxiety about fading corporate profits and weakening economies abroad, have pushed the benchmark Standard & Poor’s 500-stock index down about 5 percent since the election. On Friday, major stock indexes had their best showing of the week after President Obama and Republican leaders signaled that a compromise was possible.

Even if many of the tax breaks scheduled to expire survive a new budget deal, some business owners and investors are bracing for substantial increases in specific areas of the tax code.

The top rate on dividends, for example, could climb to 39.6 percent from 15 percent if no action is taken. Capital gains taxes, which now top out at 15 percent, could rise above 20 percent, many financial advisers say. Most investment income will also be subject to a 3.8 percent charge to help pay for President Obama’s health care law.

Stocks that pay big dividends have been popular in recent years among investors eager for an alternative to the meager returns on bank savings accounts and Treasury securities. Since October, though, the two sectors that provide the most generous dividend payments — utilities and telecommunication stocks — have been among the worst performers, hurt also in part by the devastation of Hurricane Sandy on the East Coast. Utility companies in the S.& P. 500 have fallen 9.4 percent from their highs in October. Telecommunication stocks in the index have dropped 11.3 percent from theirs, compared with the broader index’s 6.8 percent decline from its recent high.

John Moorin, the founder of a medical equipment company near Indianapolis, said he sold about $650,000 in dividend-paying stocks like McDonald’s and Coca-Cola a few days after the election, worried about the potential increase in taxes.

“I love these companies, but I’m so scared that now all of the sudden I’m going to get taxed at such a rate with them that they won’t be worth anything,” Mr. Moorin said.

Although Mr. Wynn has declared special dividends at the end of the year before — most recently in 2011 — in a call with analysts last month, he hinted that higher taxes would cause him and other chief executives to rethink big payouts in future years.

In the meantime, he added, it was “very difficult to do long-range planning with a government that moves as much as this does on so many issues.”

Leggett & Platt, a diversified manufacturer based in Carthage, Mo., decided to move up payment of its fourth-quarter dividend to December from January so shareholders could take advantage of the lower rate.

“If we can help our shareholders avoid taxes and keep more of their dividends, we’ll do it,” said David M. DeSonier, senior vice president for corporate strategy and investor relations.

While negotiators are trying to find ways to raise more revenue for the long term, some experts expect a substantial bump in tax collections in the short term as investors take a multitude of steps now that they would have taken in future years. After the top tax rate on capital gains rose to 28 percent from 20 percent at the end of 1986, federal receipts from such gains doubled to $52.9 billion in 1987, as sales surged at the end of the previous tax year.

The potential jump in tax rates has been telegraphed for months, but many investors say they did not respond sooner because they were waiting to see if Mitt Romney would defeat the president and move forward with his commitment to keep rates at current levels. President Obama, since defeating Mr. Romney, has continued his call for an increase in marginal tax rates on the wealthy. A growing number of Republican leaders have conceded that some increase is now likely.

Kristina Collins, a chiropractor in McLean, Va., said she and her husband planned to closely monitor the business income from their joint practice to avoid crossing the income threshold for higher taxes outlined by President Obama on earnings above $200,000 for individuals and $250,000 for couples.

Ms. Collins said she felt torn by being near the cutoff line and disappointed that federal tax policy was providing a disincentive to keep expanding a business she founded in 1998.

“If we’re really close and it’s near the end-year, maybe we’ll just close down for a while and go on vacation,” she said.

Of the potential changes in the tax code set to take place on Jan. 1, the scheduled increase in the tax rate on capital gains would hit a particularly broad range of investments.

Business owners, for instance, can lock in the current top rate of 15 percent on capital gains if they sell their company before the end of the year. The capital gains tax also applies to increases in the value of stocks and other securities, encouraging some investors to sell holdings that have done well. This is one of several factors cited in the recent plunge in the price of Apple shares. They have dropped 26 percent since mid-September after rising 73 percent earlier in the year.

The coming changes have not hurt all assets. Municipal bonds have become more attractive because they are exempt from most federal taxes, including the new surcharge related to President Obama’s health care law. Frank Fantozzi, a financial planner in Cleveland, is recommending that his wealthy clients increase their allocation to municipal bonds from around 30 percent to about 40 percent.

But the potential effect of the scheduled tax increases and government spending cuts has been mostly negative. Many market strategists have suggested trimming overall holdings of risky assets like stocks, and business executives are proceeding very cautiously.

Some business owners say they are holding off on hiring plans because they expect tax rates to rise. Dyke Messinger, chief executive of Power Curbers in Salisbury, N.C., said he would like to fill four slots at his construction equipment company but would only hire three people because he anticipated that his tax bill would rise by $100,000.

“It’s not a huge amount of money,” Mr. Messinger said. “But it’s enough money that you don’t want to make a misstep.”

The morning after the re-election of President Obama, Rush Limbaugh told his listeners:

I went to bed last night thinking we're outnumbered. I went to bed last night thinking all this discussion we'd had about this election being the election that will tell us whether or not we've lost the country. I went to bed last night thinking we've lost the country. I don't know how else you look at this.

The conservative talk show host, who had been an upbeat, if initially doubtful, Romney supporter throughout the campaign, was on a post-election downer:

In a country of children where the option is Santa Claus or work, what wins? And say what you want, but Romney did offer a vision of traditional America. In his way, he put forth a great vision of traditional America, and it was rejected. It was rejected in favor of a guy who thinks that those who are working aren't doing enough to help those who aren't. And that resonated.

Limbaugh echoed a Republican theme that was voiced before and after the election: Barack Obama has unleashed a coalition of Americans "who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it - that that's an entitlement. And the government should give it to them" - as Mitt Romney put it in his notorious commentary on the 47 percent.

You can find this message almost everywhere on the right side of the spectrum. The Heritage Foundation, for example, annually calculates an "Index of Dependence on Government," which grows every year:

Today, more people than ever before depend on the federal government for housing, food, income, student aid, or other assistance once considered to be the responsibility of individuals, families, neighborhoods, churches, and other civil society institutions. The United States reached another milestone in 2010: For the first time in history, half the population pays no federal income taxes. It is the conjunction of these two trends-higher spending on dependence-creating programs, and an ever-shrinking number of taxpayers who pay for these programs-that concerns those interested in the fate of the American form of government.

William Bennett, conservative stalwart, television commentator and secretary of education under President Reagan, complained on the CNN Web site that Democrats have been successful in setting

the parameters and focus of the national and political dialogue as predominantly about gender, race, ethnicity and class. This is the paradigm, the template through which many Americans, probably a majority, more or less view the world, our country, and the election. It is a divisive strategy and Democrats have targeted and exploited those divides. How else can we explain that more young people now favor socialism to capitalism?

In fact, the 2011 Pew Research Center poll Bennett cites demonstrates that in many respects conservatives are right to be worried:

Not only does a plurality (49-43) of young people hold a favorable view of socialism - and, by a tiny margin (47-46), a negative view of capitalism - so do liberal Democrats, who view socialism positively by a solid 59-33; and African Americans, 55-36. Hispanics are modestly opposed, 49-44, to socialism, but they hold decisively negative attitudes toward capitalism, 55-32.

Much of the focus in the media in recent years has been on the growing hard-line stance of the Republican Party. At the same time, there are significant developments taking place as a new left alliance forms to underpin the Democratic Party. John Judis and Ruy Teixeira originally described this alliance in 2002 as the emerging Democratic majority in a pioneering book of the same name. More recently, the pollster Stan Greenberg and a group of liberal activists have described it as the "rising American electorate."

Celinda Lake, a Democratic pollster who has devoted much of her work to analyzing the changing shape of the liberal and conservative coalitions, said in an e-mail that the rising American electorate

will have profound implications because the R.A.E. has a very different approach to the role for government, very different views on race and tolerance, different views on gender roles, and very different views on economic opportunity and security. These are some of the biggest divides in our culture.

Robert Borosage, co-director of the liberal-left Campaign for America's Future, put it more bluntly in a blog post:

In our Gilded Age of extreme inequality, with a middle class that increasingly understands the rules are rigged against them, this was the first election in what is likely to be an era of growing class warfare.

Two post-election polls - one released Nov. 14 by the Democracy Corps (founded by Stan Greenberg and James Carville), the other released Nov. 16 by the Public Religion Research Institute - reveal the decisively liberal views of the core constituencies within the rising American electorate and its support for government activism, especially measures to help the disadvantaged.

The findings from the P.R.R.I. survey are very illuminating:

*When voters were asked whether cutting taxes or investing in education and infrastructure is the better policy to promote economic growth, the constituencies of the new liberal electorate consistently chose education and infrastructure by margins ranging from 2-1 to 3-2 -- African Americans by 62-33, Hispanics by 61-37, never-married men by 56-38, never-married women by 64-30, voters under 30 by 63-34, and those with post-graduate education by 60-33.

Conservative constituencies generally chose lowering taxes by strong margins - whites by 52-42, married men by 59-34, married women by 51-44, all men by 52-41; older voters between the ages of 50 and 65 by 54-42.

*The constituencies that make up the rising American electorate are firmly in favor of government action to reduce the gap between rich and poor, by 85-15 among blacks, 74-26 for Hispanics; 70-30 never-married men; 83-15 never-married women; and 76-24 among voters under 30. Conservative groups range from lukewarm to opposed: 53-47 for men; 53-47 among voters 50-65; 46-54 among married men; 52-47 among all whites.

*One of the clearest divides between the rising American electorate and the rest of the country is in responses to the statement "Government is providing too many social services that should be left to religious groups and private charities. Black disagree 67-32; Hispanics disagree 57-40; never-married women 70-27; never-married men, 59-41; young voters, 66-34; and post-grad, 65-34. Conversely, whites agree with the statement 54-45; married men agree, 60-39; married women, 55-44; all men, 55-43.

The Democracy Corps survey specifically broke out the collective views of the liberal alliance and contrasted them with the views of those on the right. Some findings:

*By a margin of 60-13, voters on the left side of the spectrum favor raising taxes on incomes above $1 million, while voters outside of the left are much less supportive, 39-25. In the case of raising the minimum wage, the left backs a hike by an overwhelming 64-6 margin, while those on the right are far less supportive, 32-18. The rising American electorate backs raising the minimum wage by 64-6, while the people outside it back a hike by just 32-18. The left coalition supports a carbon tax or fee by 43-14 while right-leaning voters are opposed, 37-24.

Policies supported by the rising American electorate - which closely overlaps with the Obama coalition - provoke intense opposition from the right. In the aftermath of the election, Romney blamed his defeat on the "gifts" Obama handed out to "the African-American community, the Hispanic community and young people."

In fact, the rising American electorate represents a direct threat to the striking array of government benefits for the affluent that the conservative movement has won over the past 40 years. These include the reduction of the top income tax rate from 50 percent in 1986 to 35 percent; the 15 percent tax rate on dividend and capital gains income, which was 39.9 percent in 1977; the lowering of the top estate tax rate from 70 percent in 1981, with just $175,000 exempted from taxation, to a top rate of 35 percent this year with $5.1 million exempted from taxation.

At the same time, the Pew survey cited above shows the high levels of skepticism and hostility toward capitalism on the part of the emerging Democratic majority. Insofar as the liberal coalition succeeds in electing senators and representatives who share those views, the business community will have increasing difficulty in winning approval of its deregulated market and free trade agenda.

As Obama negotiates with Republican House and Senate leaders to prevent a dive over the "fiscal cliff," he will be under strong pressure from his reinvigorated liberal supporters to take a tough stand in support of tax hikes on the well-to-do and to more firmly limit spending cuts.

"Looking ahead to their post-election agenda, this is not a group looking for 'austerity,' " the Democracy Corps wrote in a report accompanying its post-election survey. "Indeed, their issues are explicitly progressive and investment-oriented," in terms of human capital. The report went on:

The rising American electorate's most important priority for the president and the Congress is "investing in education," followed by "protecting Social Security and Medicare."

In effect, the 21st century version of class conflict sets the stage for an exceptionally bitter face-off between the left and the right in Congress. The national government is facing the prospect of forced austerity, weighing such zero-sum choices as raising capital gains taxes or cutting food stamps, slashing defense spending or restricting unemployment benefits, establishing a 15 cents-a-gallon gasoline tax or pushing citizens off the Medicaid rolls, pushing central bank policy favorable to the financial services industry or curtailing Medicare eligibility.

In broader terms, the political confrontation pits taxpayers, who now form the core of the center-right coalition, against tax consumers who form the core of the center-left. According to the Tax Policy Center, 46.4 percent of all tax filers had no federal income tax liability in 2011 (although most people pay a combination of state, sales, excise, property and other levies).There are clear exceptions to this dichotomy, as many Social Security and Medicare beneficiaries (tax recipients) vote Republican, and many college-educated upper-income citizens of all races and ethnicities (tax payers) vote Democratic. Nonetheless, the overarching division remains, and the battle lines are drawn over how to distribute the costs of the looming fiscal crisis. The outcome of this policy fight will determine whether Limbaugh is correct to fear that his side has "lost the country."

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November 19, 2012

Case Pits Technology-Based Police Search Against Citizens’ Rights

By DAN FROSCHNYT

AURORA, Colo. — On the afternoon of June 2, the authorities say, a former music teacher named Christian Paetsch walked into a Wells Fargo bank waving a gun and ordered everyone to lie down.

About 15 minutes later, a phalanx of police cars descended upon an intersection a few miles away, blockading dozens of shocked motorists — including Mr. Paetsch, whom the authorities had tracked with a GPS device buried in the $26,000 he was accused of stealing.

But with only the faintest physical description and unsure which vehicle the device was in, the police trained their weapons on all 20 cars at the intersection and ordered people to show their hands. For nearly two hours, the police ordered every driver and passenger to step out of their cars, even handcuffing some of them, before discovering the missing money and two loaded firearms in Mr. Paetsch’s S.U.V.

The case, now winding its way through the federal court system, is being watched by Fourth Amendment lawyers and law enforcement experts. While advanced technology now gives the police the power to shadow a suspect moments after a crime is committed, there are still legal questions over how wide a net the authorities can cast while in pursuit.

At issue is not Mr. Paetsch’s involvement in the robbery. Rather, his lawyer, Matthew Belcher, a federal public defender, has argued that evidence seized from Mr. Paetsch’s vehicle should be thrown out on the grounds that the roadblock was unconstitutional.

The Fourth Amendment, Mr. Belcher said, should keep the police from rounding up large groups of people at gunpoint based merely on a hunch.

“Basically, the law is there to prevent the cops from doing exactly what they did,” Mr. Belcher said, “from stopping 20 to 30 people without any specific facts leading them to say that one person did it.”

Federal prosecutors declined to comment. But in court filings, they argued that the roadblock was the safest option, given the potential for a high-speed chase through Aurora.

Moreover, they said, the tracking device showed that the bank robber was clearly at a specific intersection, allowing the police to tailor the roadblock.

Last month, Judge William J. Martinez of Federal District Court in Denver agreed, ruling that the evidence was admissible and that the detention of the other motorists was justified, given that a potentially dangerous criminal was on the loose. The judge also said, however, that he was troubled by the invasive tactics used by the police toward motorists caught in the blockade.

Mr. Belcher said he planned to appeal the decision. Beyond the fate of his client, who faces seven years to life in prison, there are other unresolved issues.

According to the defense, among the indignities endured by citizens ensnared in the roadblock, a 4-year-old girl urinated on herself while strapped in her car seat. And a mother was ordered to crawl through a passenger-side door and was then handcuffed in front of her son.

Court filings show that the F.B.I. used a hand-held tracking device to determine which vehicle was emitting the satellite signal. But it took nearly an hour for the F.B.I. to arrive at the intersection with the device.

Crystal Deguzman and her 16-year-old son, who were going to the grocery store, were ordered to keep their hands in the air for over an hour, she said, and were handcuffed before being released.

“I was shaking driving home that day,” she said. “I don’t really like to drive anymore because I’m scared that’s going to happen again.”

Within days, Chief Dan Oates of the Aurora Police Department and his deputy apologized to those caught in the roadblock. But he also defended his department’s actions as the safest choice.

“The law is very clear in that investigative detentions are permissible and that police can take a reasonable amount of time to conduct an investigative stop,” the chief said.

Chief Oates said he had never encountered such a scene. Since then, he said, his department had begun using hand-held tracking devices to speed response times and implemented procedures to better isolate cars being pursued. “This is a classic case of law enforcement practices catching up to modern technology,” he said. “None of us saw this coming.”

David Lane, a lawyer, is representing Ms. Deguzman and passengers in five other cars and said his clients would seek a settlement with the city.

Aurora’s city attorney, Charlie Richardson, said he believed that Judge Martinez’s ruling made clear that the city should not be held liable.

Orin S. Kerr, a law professor at George Washington University, predicted that as the police relied more on technology, more cases like Mr. Paetsch’s would emerge.

“This technology creates a new legal situation in that there’s a real-time guarantee that the loot is in the car at an intersection at that exact time,” Mr. Kerr said. “The question becomes whether the police were reasonable in stopping all the cars at the intersection and did they hold everyone for a reasonable period of time.”

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Report: White House ‘did not alter’ Benghazi memo

By Agence France-PresseTuesday, November 20, 2012 7:00 EST

A “talking points” memo distributed to government officials about the deadly attack on the US consulate in Libya was altered by the intelligence community and not the White House, CNN reported.

Armed militants stormed the US mission in Benghazi on September 11 in a coordinated assault at two different locations over several hours that left Ambassador Chris Stevens and three other Americans dead.

CNN quoted Shawn Turner, spokesman for Director of National Intelligence James Clapper, as saying that intelligence officials — not the White House, State Department or Justice Department — had altered the talking points, which were circulated to people who spoke publicly about Benghazi.

“The intelligence community made substantive, analytical changes before the talking points were sent to government agency partners for their feedback,” Turner said.

“There were no substantive changes made to the talking points after they left the intelligence community,” he added.

The political stakes are high with Obama reputedly mulling whether to pick US ambassador to the United Nations Susan Rice as his next secretary of state, despite Republicans accusing her of misleading the public over Benghazi in a series of television interviews she gave just days after the attack.

Nearly 100 Republican lawmakers warned Obama on Monday against nominating UN envoy Rice to be his next secretary of state, replacing Hillary Clinton who is standing down.

Rice went on American talk shows five days after Benghazi, and suggested it was a “spontaneous” outcome from a protest about an anti-Islam film that had then spun out of control.

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November 19, 2012

College of Future Could Be Come One, Come All

By TAMAR LEWINNYT

Teaching Introduction to Sociology is almost second nature to Mitchell Duneier, a professor at Princeton: he has taught it 30 times, and a textbook he co-wrote is in its eighth edition. But last summer, as he transformed the class into a free online course, he had to grapple with some brand-new questions: Where should he focus his gaze while a camera recorded the lectures? How could the 40,000 students who enrolled online share their ideas? And how would he know what they were learning?

In many ways, the arc of Professor Duneier’s evolution, from professor in a lecture hall to online instructor of tens of thousands, reflects a larger movement, one with the potential to transform higher education. Already, a handful of companies are offering elite college-level instruction — once available to only a select few, on campus, at great cost — free, to anyone with an Internet connection.

Moreover, these massive open online courses, or MOOCs, harness the power of their huge enrollments to teach in new ways, applying crowd-sourcing technology to discussion forums and grading and enabling professors to use online lectures and reserve on-campus class time for interaction with students.

The spread of MOOCs is likely to have wide fallout. Lower-tier colleges, already facing resistance over high tuition, may have trouble convincing students that their courses are worth the price. And some experts voice reservations about how online learning can be assessed and warn of the potential for cheating.

MOOCs first landed in the spotlight last year, when Sebastian Thrun, a Stanford professor, offered a free artificial-intelligence course, attracting 160,000 students in 190 nations. The resulting storm of publicity galvanized elite research universities across the country to begin to open higher education to everyone — with the hope of perhaps, eventually, making money doing so.

The expansion has been dizzying. Millions of students are now enrolled in hundreds of online courses, including those offered by Udacity, Mr. Thrun’s spinoff company; edX, a joint venture of Harvard and the Massachusetts Institute of Technology; and Coursera, a Stanford spinoff that is offering Professor Duneier’s course and 200 others.

No one knows just how these massive courses will evolve, but their appeal to a broad audience is unquestioned: retirees in Indiana see them as a route to lifelong learning, students in India as their only lifeline to college-level work.

The professors involved face new challenges. “It was really intimidating at the beginning to do these lectures with no live audience, no sense of who was listening and how they were reacting,” Professor Duneier said. “I talk about things like racial differences in I.Q., Abu Ghraib and public bathrooms, and I worried that my lectures might come across as examples of American ethnocentrism.”

Feedback came quickly. When his first lecture went online, students wrote hundreds, then thousands, of comments and questions in online discussion forums — far too many for Professor Duneier to keep up with. But crowd-sourcing technology helped: every student reading the forum could vote questions and comments up or down, allowing him to spot important topics and tailor his lectures to respond.

Bigger Audiences

Top universities with courses like Professor Duneier’s stand to gain, both in prestige and in their ability to refine their pedagogy; few seem worried about diluting their brand-name appeal. The risks are greater for lesser colleges, which may be tempted to drop some of their own introductory courses — and some professors who teach them — and substitute cheaper online instruction from big-name professors.

“We’ve reached the tipping point where every major university is thinking about what they will do online,” said Peter McPherson, the president of the Association of Public and Land-Grant Universities. “In a way, the most important thing about these MOOCs from the top universities is that they provide cover, so other universities don’t need to apologize about putting courses online.”

In the rush to keep up, elite universities are lining up to join forces with a MOOC provider. Coursera, which began with Princeton, the University of Pennsylvania, Stanford and the University of Michigan in April, currently leads the field with 33 university partners. But edX, too, is expanding rapidly — the University of California, Berkeley, has joined, and the University of Texas announced that it would use edX courses for credit. Already, students in one Udacity class can get credit through the Global Campus of Colorado State University. Most MOOC providers are making plans to offer credit — and charge fees for certificates and proctored exams.

This crowd-sourced version of college is seeping into every corner of academia. While the earliest MOOCs were concentrated in computer science and engineering — subjects suited to computer grading — Professor Duneier is one of the pioneers offering humanities courses, in which the whole grading process, from essays to exams, is handled by the students using grading criteria designed by the professor.

There are courses on modern American poetry (Senator Richard J. Durbin, Democrat of Illinois, is a student), health care policy and the Affordable Care Act (taught by Dr. Ezekiel J. Emanuel, a former health adviser to the Office of Management and Budget) and Introduction to Improvisation.

Professors delight in reaching more students in one course than they could otherwise teach in a lifetime. Dr. Ezekiel shows off a postcard from a student in Sri Lanka. Al Filreis, the poetry professor, tells of an 81-year-old Greek shut-in who got 180 responses to his essay on Emily Dickinson. There are stories of elderly students doing homework together at their assisted-living facility and Capitol Hill staff members taking the health policy course.

‘The Wild West’

Professor Duneier has been thrilled. “Within three weeks, I had more feedback on my sociological ideas than I’d had in my whole teaching career,” he said. “I found that there’s no topic so sensitive that it can’t be discussed, civilly, in an international community.”

The online discussion forum spawned many global exchanges. Soon after Professor Duneier talked about social norms, using as his example the lack of public restrooms for street vendors — including an embedded video of New York vendors — students in Hong Kong, India, Russia and elsewhere commented on the situation in their own cities.

Meanwhile, around the world, study groups were forming. In Katmandu, Nepal, Dipendra K.C., who is 22, connected with four older classmates, meeting in person to prepare for the midterm and final. “We were looking at the lectures and the discussion forum and pointing out topics the professor was highlighting, to try to predict the questions on the exam,” he said.

To create the feel of a Princeton seminar, Professor Duneier used a video chat room in which six or eight students — Dipendra was one, and others came from Siberia or Iran or Princeton — discussed the readings; other students, over the course of the week, could replay the video and comment.

For Doug MacKenzie, 34, a Philadelphia firefighter who was part of the seminar, the video chats with far-flung classmates were the highlight. “I was just thinking, this is really neat, to be able to talk to someone in Siberia,” he said. “This class opened my eyes a little about how my parents raised me and why I behave in a certain way.”

The price tag — zero — was crucial. “I’ve always wanted to go into a degree program, but the problem is that I don’t have the money,” said Mr. MacKenzie, who has taken four MOOCs.

Most MOOCs package their lessons in short segments, with embedded quiz questions to keep the viewer engaged, and provide instant feedback. But the approach is still experimental — especially in the humanities.

“This is still brand new,” Professor Duneier said. “It’s still the Wild West.”

And while there is a belief that students learn from assessing their classmates’ work, no one knows how well the process works. The concept is simple: each student must score the work of five classmates to get their own score, the average of what their peers gave them. But the reality is trickier. What if students do not take scoring seriously? What if the rubric is unclear? Do peer assessments match the scores the professor would have given?

To find some answers, Professor Duneier and his assistants have painstakingly graded thousands of midterms and finals, comparing their scores with the peer graders’. When he saw the first batch of midterms, he realized that some students had provided unexpected responses that would not have earned many points on his planned rubric, despite their clearly understanding the material. So he tweaked the rubric, allowing for extra “makeup” points on some questions. But the computer tallied the regular and makeup points together, giving some students more total points than the exam was worth.

“I had to announce to the students that some had gotten scores that were higher than they should have been,” he said. “And as data, the midterm scores are useless. But it helped us learn more about writing rubrics.”

Testing, Testing

Now, months after the course ended, he and his assistants are hand-scoring the final exams, checking the scores they assign (he avoids the word “grades”) against those given by students. So far, he has found an impressive correlation of 0.88. The average peer score was 16.94 of 24 possible points, compared with an average teaching-staff score of 15.64. Peer graders give more accurate scores on good exams than bad ones, they found, and the lower the score, the more variance among graders.

As with other MOOCs, less than 5 percent of those who enrolled in the sociology course completed it: 2,200 midterm exams and 1,283 final exams were submitted. Some students listened to all the lectures and did all the readings but did not take exams. There was no practical reason to take the exams, since Princeton — unlike Udacity, edX or other universities working with Coursera — does not give certificates of completion.

“I wouldn’t be comfortable giving any kind of certificate until we know more about how it’s working,” Professor Duneier said.

Christopher L. Eisgruber, Princeton’s provost, said that while his university’s first four MOOCs were going well, he had no plans to offer credentials.

“Our primary goal in doing this is to find ways to improve education on our own campus, to take the passive experience of students scribbling notes while a professor talks, and have some lectures they can watch, to free up classroom time for more interactive activities,” he said. “It’s terrific that we can put information online for people to share, but we don’t want to mislead them into thinking it’s the same as a Princeton course.”

In hand-grading the midterm, Professor Duneier and his assistants found that about 3 percent of the students had plagiarized from Wikipedia, lecture notes or other sources — and that two students with the same last name submitted identical answers. (Even with thousands of exams, plagiarism was noticeable, since one person scored all responses to a particular question.)

So right before the final, Professor Duneier detailed the rules for a closed-book exam, realizing that international students might not share American concepts of plagiarism. As he recalled his instructions, it was clear how close he felt to this online class, these students he has never met.

“I said, ‘Don’t use your notes, don’t Google, don’t ask your wife,’ ” he said. “When I said, ‘Don’t ask your wife,’ I pictured this couple, or maybe brother and sister, who had submitted identical papers, and I imagined them watching and being surprised, like, ‘Hey, the professor’s talking to us.’ ”

And on the final, the hand-scorers have not yet detected a single example of plagiarism.